Inflation falls 1.7 pp to 4.0% in May

The year-on-year rate of change of the Consumer Price Index (CPI) in Portugal fell to 4.0% in May, 1.7 percentage points less than in April, according to a flash estimate released on Wednesday by Statistics Portugal (INE).

According to INE, “based on the information, the year-on-year variation rate of the Consumer Price Index (CPI) decreased to 4.0% in May 2023, a rate 1.7 percentage points (p.p.) lower than in the previous month”.

According to him, “this deceleration is partly explained by the base effect resulting from the increase in prices of electricity, gas and food products in May 2022, and also by the VAT exemption on some essential food items”.

The underlying inflation indicator (total index excluding unprocessed food and energy products) registered a variation of 5.5% in May (6.6% in the previous month).

The change in the energy index decreased to -15.5% (-12.7% in the previous month) and the unprocessed food index decelerated to 8.9% (14.1% in April).

Compared to the previous month, the change in the CPI was -0.7% in May (0.6% in April and 1.0% in May 2022), with an estimated average change over the last 12 months of 8.2% (8.6% in the previous month).

The Portuguese Harmonised Index of Consumer Prices (HICP) registered a year-on-year change of 5.4% in the month under review, compared to 6.9% in April.

Final figures for the May 2023 CPI will be published by INE on 14 June.