Euro Area inflation decreases. Portugal stands below average

The Euro Area annual inflation rate decreased to 1.3% in June, below the 1.4% it had in May. In Portugal, the price variation stood below the average and it was negative when making a monthly comparison. The data was disclosed this Monday by Eurostat and it shows the price variation is still far from the goal set by the European Central Bank.

After standing at almost 2% in the first months of 2017, inflation backed down once again, asking for caution concerning the Euro Area economic recovery assessment. When making a monthly comparison — that is to say, comparing this year’s June and May prices –, variation was zero. These data show that taking away the effect of energy prices, the underlying inflation suffered a slight increase form 1.1% to 1.2%.

The cut back of around 1.8% in telecommunication prices should be emphasized when regarding the sub-indexes with the most influence in price variation of the Euro Area countries. That segment weights in a total of 30.6% of the inflation index, having contributed to the removal of one percentage point in the homologous variation rate. In June, the Roaming Like At Home regulation went into force, aiming to reduce the cost of mobile communications in the European Union.

As for Portugal, the homologous inflation rate was 1%, one percentage point below the average. When making a monthly comparison, prices suffered a 0.5% decrease, the most negative data in the European Union. One of the influences could have been the Pope’s visit to the Shrine of Fátima on May 13, when there was an abnormal increase in prices charged by the tourism sector. These values are different from those disclosed by Statistics Portugal (INE) — which pointed to an homologous variation rate in the prices index of 0.9% — because Eurostat shows the harmonized values when making comparisons between Member States.