Inflation slows down to less than 1%

  • ECO News
  • 12 July 2017

The variation in prices to the consumer decreased to last June's levels, strongly influenced by the deceleration in the food and non-alcoholic beverages' sector.

Inflation in Portugal declined again in June, this time to the lowest percentage of the year. Last month, the consumer prices index registered by Statistics Portugal (INE) stood at 0.9%, below all other months’ percentages which always surpassed 1%; this deceleration has been taking place since January, when inflation reached 2% thanks to Easter and tourism.

From April to May there had already been a strong deceleration, from 2% to 1.5%, because of the early Easter Sunday this year, which was in April and placed that month in an homologous advantage in comparison to April 2016, when there was no extra push from tourism. In June, there is a new deceleration to 0.9%.

The Portuguese Harmonized Index of Consumer Prices, used to compare inflation in different European countries, also stood at just 1%, a 0.7 percentage points decrease in comparison to the previous month. Statistics Portugal state it is a lower percentage than Eurostat’s estimate for the Euro Area; in May, Portuguese inflation had surpassed that average.

Statistics Portugal (INE) states that the largest influence in this deceleration was the reduction of the foods and non-alcoholic beverages’ sector, in which prices significantly decelerated — from 2.1% to 0.2%. In restaurants and hotels, the decrease was also from 4.9% to 3.5%.