EU revises Portugal’s inflation upwards to 4.4% this year

The European Commission has revised upwards the inflation rate for Portugal by 2.1 percentage points (p.p.) to 4.4% this year, but below the 6.1% projected for the eurozone, according to forecasts released on Monday.

According to the spring macroeconomic forecasts released today, the Harmonised Index of Consumer Prices (HICP) is expected to rise from 0.9% in 2021 to 4.4% in 2022 before falling to 1.9% in 2023.

The inflation rate estimate for Portugal exceeds the government’s forecast, which predicts 4% this year and 1.6% in 2023.

Even so, and despite the upward revision of the 2.3% forecast published in February, the Brussels estimate for this year places Portugal as the country with the lowest inflation rate, with the average for the euro area estimated at 6.1% and for the European Union at 6.8%.

In the report, the EU executive projects that inflation in Portugal will peak in the second quarter of this year and gradually ease after that.

Brussels estimates that ‘core’ inflation will be 3.7% this year and 2.2% in 2023.

HICP averaged 0.9% in 2021, reaching 2.4% in the last quarter of 2021 and rising to 4.4% in the first quarter of 2022, as the prices of energy and other ‘commodities’, including metals, building materials and agricultural products, continued to grow, it notes.