Macro View

reading time: 3 mins

Summing up, inflation and core inflation, 1.86%YoY and 2.37%YoY; respectively; in line with preliminary data. Core data is resilient at 2.4%, mainly due to Services, +3.56%YoY/+60bpMoM, is a source of pressure. Finally, Food prices excluding the VAT impact at the beginning of the year should be flat.   

The Portuguese Statistic Institute has just released, August’s CPI final data and its subcomponents.  

We would highlight the following:

1. CPI: +1.86%YoY; in line with preliminary data; sequentially: -34bp; compares with the 12MMA (12 months moving average): 2.3% and 3MMA of +2.4%;
2. Core CPI: +2.37%YoY; in line; sequentially: -17bp; compares with the 12MMA: +2.7% and 3MMA +2.4%;
3. Services: +3.56%YoY vs. 12MMA: +4.1% and 3MMA: +3.6% (sequentially: +60bp);   
4. Energy: -1.45%YoY vs. 12MMA: -0.2% and 3MMA: +4.0% (sequentially: -123bp);
5.  Food and Non-alcoholic Bev: +2.71%YoY vs. 12MMA: +2.7% and 3MMA: +3.1% (sequentially: -49bp);
6. Clothing and Footwear: +0.27%YoY vs. 12MMA: -0.8% and 3MMA: -0.3%;
7. Restaurant/Meals: +4.71%YoY vs. 12MMA: +6.4% and 3MMA: +5.3% (sequentially: +40bp);
8. Postal Services: +8.4%YoY vs. 12MMA: +8.6% and 3MMA: 8.4% (sequentially: flat);
9. Telecommunications +7.24%%YoY vs. 12MMA: +6.2% and 3MMA: +7.1% (sequentially: flat);
10. Rents +7.16%YoY vs. 12MMA: +6.3% and 3MMA: 7.1% (sequentially: +41bp).

Our comments: August CPI’s data in line with preliminary data, the downward trend, lower inflation data, remains in place, even that Core inflation is resilient around 2.4%. In fact, Services +3.56%YoY in line with the 3MMA has been a source of pressure. Meanwhile, Food prices +2.71%YoY/-49bpMoM; the impact derives mainly from VAT change at the beginning of the year, excluding the tax impact, prices should be flat.

Summing up, inflation and core inflation, 1.86%YoY and 2.37%YoY; respectively; in line with preliminary data. Core data is resilient at 2.4%, mainly due to Services, +3.56%YoY/+60bpMoM, is a source of pressure. Finally, Food prices, excluding the VAT impact at the beginning of the year, should be flat.   

Source: INE, AS Independent Research