Macro View

(reading time: 3 mins)

Quick Comment: CPI Portugal final data – December’s CPI: 2.19%YoY (Core 2.05%), o/w - Services inflation 3.86%; in line with moving averages and Goods inflation 0.98%; below moving averages. Inflation at Services, more labour intensive, remains high, because of the robust job market and wages, namely minimum salary (2026: +5.75%). The current environment should remain in place, or it could intensify, as the job market is becoming tighter.

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

We would highlight the following:

• CPI: +2.19%YoY; in line with preliminary data; sequentially: +9bp; compares with the 12MMA (12 months moving average): 2.3% and 3MMA of +2.2%;
• Core CPI: +2.05%YoY/+12bp MoM; compares with the 12MMA: +2.2% and 3MMA +2.1%;

• Services: +3.86%YoY/+71bp MoM vs. 12MMA: +4.0% and 3MMA: +3.8%;
• Goods: +0.98%YoY/-37bp MoM vs. 12MMA: 1.1% and 3MMA: +1.2%;    
• Energy: -2.38%YoY/-1.13bp MoM vs. 12MMA: -0.2% and 3MMA: -1.5%;

• Food and Non-alcoholic Bev: +3.47%YoY/+10bp MoM vs. 12MMA: +2.8% and 3MMA: +3.5%;
• Clothing and Footwear: -1.69%YoY vs. 12MMA: -1.0% and 3MMA: -1.6%;
• Household Equipment: -3.01%YoY vs. 12MMA: -1.4% and 3MMA: -2.5%;  
• Restaurant/Meals: +6.78%YoY/+23bp MoM vs. 12MMA: +6.2+% and 3MMA: +6.8%;
• Postal Services: +6.15%YoY/ 0%MoM vs. 12MMA: +6.3% and 3MMA: 6.2%;
• Telecommunications -2.69% YoY/+80bp MoM vs. 12MMA: -0.6% and 3MMA: -3.4%;
• Rents +4.91%YoY/+24bp MoM vs. 12MMA: +5.3% and 3MMA: 5.0%.

Our comments: December’s CPI final data, almost in line with preliminary data, CPI: 2.19%YoY and core data, 2.05%; figures slightly below moving averages and close to the ECB target 2%. Nevertheless,  the general trend remains in place, Services inflation, 3.86%YoY, close to the moving averages, and Goods inflation at 1%. So, as the job market remains tight and minimum wages continue to increase (2026: 5.7%), inflation at Services, more labour intensive, should remain high. Meanwhile, Goods inflation is already performing positively, around 1%; so, the current trend should remain in place, however Services inflation pressure could intensify, as the labour market is becoming tighter.               

Source: INE, AS Independent Research