The IPC is compiled by the INE (Spain's National Statistics Institute) from a representative basket of goods and services (food, housing, transport, leisure...) and its year-on-year change is the official measure of inflation in Spain.
What it's used for
- Updating rental prices when the lease is indexed to the IPC.
- Revaluing pensions and some salaries.
- Calculating the real purchasing power of your savings: if your money doesn't grow faster than the IPC, it loses real value over time.
Headline IPC vs. core IPC
The headline IPC includes all products, while the core IPC excludes energy and fresh food, which are more volatile prices, so it's typically used to gauge the underlying trend of inflation.