Inflation falls to 9.6% in December

The year-on-year rate of change of the Consumer Price Index (CPI) fell to 9.6% in December from 9.9% in November, according to a flash estimate released on Friday by Statistics Portugal (INE).

According to the INE, “based on the information already obtained, the year-on-year variation rate of the Consumer Price Index (CPI) fell to 9.6% in December, a rate that is 0.3 percentage points lower than in the previous month.

The underlying inflation indicator (total index excluding unprocessed foodstuffs and energy) should have registered a variation of 7.3% in December (7.2% in the previous month), the highest rate since December 1993.

If the INE’s flash estimate is confirmed – definitive figures for the December CPI will be published on 11 January – this will be the third fall in inflation in a year and a half, after August and November had recorded the only falls in the year-on-year change in the CPI since June 2021.

In October, the inflation rate of 10.1% was the highest since May 1992.

According to the statistical institute, in December, the year-on-year rate of change of the energy products index is estimated to have decreased to 20.9% (3.8 percentage points lower than the previous month).

The index for unprocessed food products “should have registered a variation of 17.6% (18.4% in November), contrasting with the acceleration estimated for processed food products, which should have registered a variation of 17.5% (16.8% in the previous month)”.

In December, the variation in the CPI should have been -0.3% (0.3% in November and zero in December 2021).

In view of this data, the INE estimates that in 2022 the average rate was 7.8% (7.3% in the 12 months prior to November).

As for the Portuguese Harmonised Index of Consumer Prices (HICP), it should have registered a year-on-year change of 9.8% in December, compared to 10.2% in the previous month.