Since the start of the war in Ukraine (24 February 2022), buying cooking oil, meat or fresh fruit has weighed more and more on the Portuguese wallet. According to data released yesterday from the National Statistics Institute (INE), the price of cooking oil rose 36.2% in August compared to February. It is the food product category that recorded the largest increase. This is followed by poultry, which is now 25.1% more expensive, and pork, whose price has increased by 23.4%.
Fresh or chilled fruit was up 14.4% and fruit in general was up 13.7%. The price of bakery products, biscuits and crackers increased by 12.5% and milk, cheese and eggs by 10.3%. Bread, with an increase of 8.8%, and fish, with an increase of 8.7%, are the products with the lowest price variation between February and August.
According to INE, “food products contributed about 40% of the total change in the CPI (Consumer Price Index)”. “In this group, more than 60 thousand prices related to more than 250 products were collected,” explains the statistical office.
On an annual basis, the unprocessed food index registered its highest change since October 1990 in August, standing at 15.4% (see infographic). In July the increase was 13.2%.
Despite the rise in food prices, the Portuguese economy saw inflation slow in August, largely due to the slowdown in energy costs, namely fuel, clothing, footwear and health. Indeed, and according to the INE report, inflation fell further, to 8.9% year-on-year, 0.2 point less than in the previous month. It is the first drop in 12 months. The Institute’s quick estimate had initially predicted a variance of 9%.
The energy products index, which stood at 24%, represented a decline of 7.2 percentage points compared to the year-over-year change in July, he reveals. Compared to February, this decrease is explained by the drop in fuel prices, explains the INE. Footwear and apparel also contributed to this drag on price increases, as they recorded a price decline of 1.57% in August, compared to the same month in 2021.
Healthcare expenditure also showed a negative variation of 3.49%. According to the same source, “the health class is the only one to make a relevant negative contribution, due to the extension of the user fee waiver criteria that took place in June”.
Not only food, but also tourism prevented a further fall in prices, which is normal in the usual summer holiday months. According to the statistics office, prices in the “Restaurants and hotels” sector rose by 16.3% year-on-year, compared to 14.8% in July.
Prices for housing, water, electricity, gas and other fuels also weighed on inflation, although they slowed the increase to 14.9%, from 16.6% in July. In transport, the fall in petrol and diesel prices reduced the tariff hike to 10.4% (they had recorded 12.8% in July).
In the benchmark inflation used by the European Union when comparing the different Member States, the harmonized price index was 9.3%, 0.1 point less than in July. Compared to the eurozone average, Portugal was 0.2 percentage point higher, while the Portuguese index was 0.5 point higher in July. It is also estimated to have an average variation of the index over the last 12 months of 5.4%.
As for the rental market, INE reveals that rents per square meter increased by 2.8% year-on-year in August. According to the institute, “all regions showed positive year-over-year variations in rents, with Lisbon and the Azores showing the most intense increases (3.1%)”.
The average annual variation in inflation, calculated in August, serves to determine rent increases for the following year. However, under this rule, landlords are allowed to impose a 5.4% increase on their tenants. However, in the cabinet package of measures aimed at families to mitigate the rise in inflation, it was proposed to set a maximum limit of 2% for rent increases (see opposite). The measure will be discussed and finally voted in parliament on the 16th.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
