The Spanish government is planning a 2% pay raise for all civil servants in 2022. | C. POLLS

The Spanish government plans to give all civil servants a 2% pay raise in 2022 to help their wages keep pace with rising consumer prices, a source at the budget ministry said on Tuesday.

The pay increase will have to be ratified by the full cabinet and then by parliament before the end of this year as part of next year's government budget bill.

Flash data from statistics institute INE last week showed the 12-month inflation rate hitting a 13-year high of 4%.

The government says the rise in prices is transitory but the Bank of Spain has warned of second-round effects, such as wage hikes, that could make inflation persist.

Spain's minimum wage was raised by 1.6% in September and the government plans further increases for 2022.

Public pensions are meanwhile due to be increased on Jan. 1 to match the average 2021 inflation rate, which experts estimate will be around 2.8%.

The Socialists and radical left party Unidas Podemos, which comprise the ruling coalition, agreed a budget draft on Tuesday after weeks of bickering, having eventually found common ground on housing, the most disputed issue.