Inflation rises to 1.6% aided by the ‘fat tax’

  • ECO News
  • 10 March 2017

Inflation in Portugal continues to accelerate, with the help of the increased price in soft drinks and food products. In the leisure and communications sector, prices increased less.

Inflation increased to 1.6% in February in comparison to the same month of 2016 — a stronger acceleration than in January, which was 1.3%.

That percentage, disclosed this Friday by Statistics Portugal (INE), was aided by the more intense variation in the unprocessed food and soft drinks sectors, in which the increase was 3.9%, in the month in which the fat tax was implemented.

The new tax on soft drinks, the so called ‘fat tax’, came into force on February 1, and it varies between 0.5% and 1.2%. However, it will only be required that all drinks are sold with the tax from April 1 onward, so sellers are able to clear their stocks.

The consumer prices index, the most important indicator of inflation, measures the differences in prices to acquire goods and services. In February, there was a larger increase in the transports and food sectors than in January, but there were also some areas in which the tendency was a decrease or a slowdown. The largest plunge in prices was in the clothing and footwear sectors, in which there was a 1.8% negative variation, due to the peak in the February sales season.

In the twelve months until February, 2017, inflation increased an average of 0.7%, an equal rate if unprocessed and energetic foods are not accounted for.