Portuguese economy grows unexpectedly

Inflation in Portugal accelerates to 2.3% in January

INE flash estimate reflects ending of zero IVA

Consumer price inflation in Portugal accelerated to 2.3% in January, or 0.9 of a percentage point more than in December, driven by electricity prices and the end of zero value-added tax on some essential items, according to a flash estimate released today by National Statistics Institute INE.

“This acceleration mainly reflects the price increases in electricity and the ending of the IVA exemption for several essential food items,” said the institute said in a statement. “The core inflation index, which excludes energy and unprocessed food products components was 2.5% (2.6% in the previous month)” – meaning core inflation actually dropped.

“The annual rate of change of the index for energy products increased to 0.2% (-10.5% in December) and the estimated rate for unprocessed food was 3.2% (2.0% in the previous month),” the release adds.

Compared to December, there was no change in the CPI (after a -0.4% drop in December from November, and a -0.9% month-on-month drop in January of 2023).

Over the last 12 months, INE estimates, the average inflation rate was 3.8% (down from 4.3% in December).

In January, the Portuguese Harmonised Index of Consumer Prices (HICP) showed a year-on-year change of 2.6%, compared to 1.9% in the previous month.

The final CPI figures for January 2024 are to be published on February 12.