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CPI Portugal final data – June CPI: 3.2%YoY/+6bpMoM and Core inflation 2.5%YoY/+30bpMoM. Meanwhile, Services inflation remains under pressure, 4.19%YoY/88bpMoM and is pressuring upwards Core inflation. Data is coherent with an economy that is close to full employment…    

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

We would highlight the following:

• CPI: +3.22%YoY; in line with preliminary data; +6bp sequentially; compares with the 12MMA (12 months moving average): 2.6% and 3MMA of +3.3%;
• Core CPI: +2.50%YoY (+30bpMoM); compares with the 12MMA: +2.1%/3MMA +2.3%;

• Services: +4.19%YoY/+88bpMoM vs. 12MMA: +3.7%/3MMA: +3.6%;
• Goods: +2.43%YoY/-0.60%MoM vs. 12MMA: 1.8%/3MMA: +3.0%;    
• Energy: +9.12%YoY/-310bpMoM vs. 12MMA: +2.5%/3MMA: +11.3%;
• Food and Non-alcoholic Bev: +2.95%YoY/+12bp MoM vs. 12MMA: +3.6%/3MMA: +3.5%;
• Clothing and Footwear: -2.12%YoY vs. 12MMA: -1.6%/3MMA: -1.3%;
• Household Equipment: -0.62%YoY vs. 12MMA: -1.5%/3MMA: -0.6%;  
• Restaurant/Meals: +6.61%YoY vs. 12MMA: +6.6+%/3MMA: +6.6%;
• Telecommunications (bundled services) -0.74% YoY vs. 12MMA: -1.3%/3MMA: -0.3%;
• Rents +5.20%YoY vs. 12MMA: +5.1% and 3MMA: 5.2%;
• Postal Services: +5.80%YoY vs. 12MMA: +6.0% and 3MMA: 5.8%.
  
  

Our comments: final inflation data in June, 3.22%YoY/+6bpMoM and Core data: +2.5%/+30bp; in line with preliminary data. Nevertheless, core data is under pressure, mainly due to Services inflation, +4.19%YoY/+88bpMoM, while Good’s inflation, +2.43%/-6bp is adjusting, after Iran’s war impact. The pressure on Services inflation is coherent with an economy that remains close to full employment reaching record figures, employed population keeps growing around 2.5%YoY, Active Population around +2% and Unemployed Population comes down ca. 7%YoY,

All in all, we should expect Goods inflation to continue to adjust, however Services inflation above 4%, it probably means, core inflation data to remain around 2.5% or higher.

Source: INE, AS Independent Research