Annual inflation slowed to 4.0% in May

Statistics Portugal (INE) confirmed on Wednesday that the year-on-year inflation rate decreased to 4.0% in May, 1.7 percentage points lower than in April.

In a statement released today, INE confirmed the inflation rate figure first announced on 31 May and said that this deceleration is partly explained by the base effect resulting from the increase in electricity, gas and food prices that occurred in May 2022.

“The VAT exemption on a some essential foodstuffs also contributed to the deceleration recorded in May, with an estimated impact on total CPI variation of around 0.8 percentage points,” INE said.

The INE also noted that the underlying inflation indicator (total index excluding unprocessed food and energy products) registered a variation of 5.4%, compared with 6.6% in April.

The change in the energy index fell to -15.5% from -12.7% in the previous month, and the unprocessed food index slowed to 8.9% from 14.1% in the previous month.

The monthly change in CPI was -0.7% (against 0.6% in the previous month and 1.0% in May 2022).

The average change over the last twelve months was 8.2%, compared to 8.6% in April.

The Portuguese Harmonised Index of Consumer Prices (HICP) registered a year-on-year change of 5.4%, 1.5 percentage points lower than in the previous month and 0.7 percentage points lower than the value estimated by Eurostat for the Euro Zone (in April, this difference was 0.1 percentage points).

Excluding unprocessed foodstuffs and energy, the HICP in Portugal reached a year-on-year change of 7.3% in May (against 8.2% in April), higher than the corresponding rate for the euro area (estimated at 6.9%).

The HICP recorded a monthly variation of -0.4% (versus 1.3% in the previous month and 1.0% in May 2022) and an average variation over the last twelve months of 8.8% (versus 9.0% in the previous month).