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European Commission keeps inflation in Portugal at 2.3% this year
The European Commission today maintained the forecast for the inflation rate in Portugal at 2.3% this year and 1.9% in 2025.
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Economia Inflação
In the spring economic forecasts released today, the EU executive maintains, compared to the February report, the forecast of a reduction in the Harmonised Index of Consumer Prices (HICP) from 5.3% in 2023 to 2.3% in 2024 and 1.9% in 2025, reflecting a substantial slowdown in energy and other raw material prices.
Brussels recalls that, in quarterly terms, the year-on-year inflation rate reached 2.4% in the last quarter of 2023, but rose to 2.5% in the first quarter of 2024, mainly due to base effects on energy product prices.
However, services inflation slowed at a much slower pace to 5% (year-on-year) in the first quarter of 2024, driven by "strong wage growth" and demand pressures from tourism-related activities.
According to the Commission, the expected increase in real wages and employment "should keep some pressure on prices, leading to a much slower adjustment in services inflation".
In the Stability Programme, the Portuguese Government forecasts an inflation rate, measured by the HICP, of 2.5% this year and 2.1% in 2025.
Read Also: Brussels more optimistic: Sees Portugal growing 1.7% this year (and inflation?) (Portuguese version)
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