Spaniards will need to reach further into their pockets to pay for the increases in prices in energy, travel and medical supplies.
Consumer prices rose by three percent in 2012 and the inflation rate stayed at 2.9 percent in December.
Electricity bills are also set to increase three to six percent for around 20 million families this year; those exceeding the average consumption will have to pay a surcharge of up to eight percent.
Commuting and travelling around the country will become more expensive as fuel prices are set to hike by 3.5 to 4.5 cents per litre, train ticket prices by three percent and airplane tickets by six percent. An average family will suffer an increase of around 25 euros in a year according to the increase of the electricity rate, Organization of Consumers and Users (OCU) Public Relations Manager Antonino Joya Verde said.
The government has put a greater strain on pensioners after introducing cuts to their payouts and a one-euro fee on top of prescription charges.
We are paying the national welfare state through our taxes so if we pay one-euro fee for each medical act we are repaying, said Verde.
The Spanish government has been sharply criticised over its austerity measures that have hit the middle and working classes the hardest.
Spanish Prime Minister Mariano Rajoy has said that the country will continue to suffer from recession in 2013, with its economy facing a very tough time. We still have a very tough year ahead, especially in the first half, Rajoy said on December 28, adding, We have to persevere in the reforms we have embarked on. The economy will continue in recession.