MADRID, Reuters – Spanish 12 month inflation fell to 8.4% from March’s nearly 40-year peak. However, core inflation (which excludes volatile parts) was at its highest level since 1995.

Russia’s invasion in Ukraine, and subsequent inflationary pressures on the energy and food markets have accelerated the pace of inflation that was already increasing after the pandemic coronavirus.

Thursday’s National Statistics Institute data (INE), came back sharply lower that the 9.8% March reading. It marks the first monthly slowdown of price rises since January.

Reuters polled analysts to forecast an inflation rate of 9% over the next 12 months.

However, April’s mild easing won’t allay central bankers’ concerns that the accelerating price rises are still to come to an end.

The Core Inflation measure which subtracts food and energy costs and is closely watched by policymakers, rose to 4.4% from 3.4% just a month ago, raising concerns over persistent cost of living increases.

INE reported that fuel and electricity prices have fallen slightly but food and beverage prices are up from a previous year.

The Bank of Spain issued a warning Wednesday about the potential for second round effects on corporate profits and wages due to the persistance and severity of the recent spikes in inflation.

Realizing the negative effects of price rises, Pedro Sanchez, the Prime Minister, recently stated that Spain will reduce its forecasted economic growth for the year at 7.7%.

New forecasts will be released by the Economy Ministry on Friday.