Inflation hits 7.2% in April, highest rate in 20 years

The year-on-year change in Portugal’s consumer price index (CPI) was 7.2% in April, up from 5.3% in the previous month and the highest since March 1993, Statistics Portugal (INE) said on Wednesday.

“The year-on-year change in the Consumer Price Index (CPI) was 7.2% in April 2022, a rate 1.9 percentage points higher than in the previous month and the highest since March 1993,” INE said, confirming the figures forecast in the flash estimate released at the end of April.

The underlying inflation indicator (total index excluding unprocessed foodstuffs and energy) also accelerated, registering a variation of 5.0% (3.8% in March), “the highest value since September 1995”.

The change in the energy products index rose to 26.7%, from 19.8% in the previous month, which corresponds to “the highest value since May 1985”.

The index for unprocessed foodstuffs showed a variation of 9.4%, compared to 5.8% in March.

According to the INE, “by classes of expenditure and compared to the previous month, the increases in the year-on-year rates of change in ‘housing, water, electricity, gas and other fuels’ and ‘restaurants and hotels’, with variations of 10.2% and 9.9%, respectively (5.4% and 6.6% in the previous month), are of note.

“In the opposite direction, ‘alcoholic beverages and tobacco’ and ‘clothing and footwear’ showed a decrease in the year-on-year rate of change to 0.6% and -0.7% respectively (2.6% and 0.1% in the previous month),” it adds.

Among the classes with positive contributions to the year-on-year change in the CPI, ‘food and non-alcoholic beverages’ and ‘transport’ stand out. The only class with a negative contribution was ‘clothing and footwear’.

Compared with the previous month, the year-on-year change in the CPI was due to increased contributions from ‘food and non-alcoholic beverages’, ‘housing, water, electricity, gas and other fuels’, ‘transport’ and ‘restaurants and hotels’.

In contrast, the contribution of ‘alcoholic beverages and tobacco’ and ‘clothing and footwear’ decreased.

In April 2022, the monthly change in the CPI was 2.2% (2.5% in the previous month and 0.4% in April 2021), while the average change over the last 12 months was 2.8% (2.2% in March).

The Portuguese Harmonised Index of Consumer Prices (HICP) showed a year-on-year change of 7.4%, “a new record high since the beginning of the HICP series in 1996”.

According to the INE, this rate is 1.9 percentage points higher than in the previous month and 0.1 percentage points lower than the value estimated by Eurostat for the Euro area (in March, this difference was 1.9 percentage points).

Excluding unprocessed food and energy, the HICP in Portugal reached a year-on-year change of 5.3% in April (4.1% in the previous month), higher than the corresponding rate for the Euro area, which stood at 3.9%, “maintaining the upward profile seen in recent months”.

“This index in Portugal presents a very pronounced upward profile in recent months, standing above the euro area average since January 2022,” INE points out, specifying that “in April, this difference increased to 1.4 percentage points (0.9 percentage points in March).”

The HICP recorded a monthly variation of 2.4% (2.6% in the previous month and 0.5% in April 2021) and an average variation over the last 12 months of 2.6% (2.0% in the previous month).