Lisbon, Sept. 11, 2024 (Lusa) - Financial rating agency Moody's predicts a "continuation of the downward trend" in inflation in Portugal, benefiting from the fall in energy prices and underlying inflation, pointing to an average annual rate of 2.2%.
In a commentary released on Wednesday after the National Statistics Institute (INE) confirmed a drop in the year-on-year inflation rate to 1.9% in August, 0.6 percentage points less than in July, Moody's Analytics economist Catarina Noro said that this drop "is in line" with the agency's expectations "of a continuation of the downward trend" in price developments in Portugal.
According to Noro, "this drop was mainly attributed to a decrease in the price of energy products, marking the first year-on-year decrease since the beginning of the year".
By the end of the year, Moody's predicts "further reductions in inflation for the rest of the year, driven by falling rates in both energy and underlying inflation". The latter excludes the most volatile prices, such as unprocessed food and energy.
According to Catariana Noro, "although inflation in the services sector may remain high, it is expected to be offset by a significantly lower inflation rate in goods, contributing to a steady decline in the overall inflation rate."
"Our forecast for this year's average inflation rate stands at 2.2%," she adds.
The year-on-year inflation rate stood at 1.9% in August, 0.6 percentage points less than in July, falling below 2% for the first time since December 2023, INE confirmed today.
"The year-on-year change in the CPI [Consumer Price Index] was 1.9% in August 2024, 0.6 percentage points less than in the previous month. Rounded to one decimal place, this rate coincides with the value of the flash estimate released on 30 August," said INE.
The underlying inflation indicator (total index excluding unprocessed food and energy products) recorded a change of 2.4%, identical to July, while the change in the energy products index was revised to -1.5% compared to -1.4% in the flash estimate (4.2% in the previous month), "essentially due to the combination of the monthly reduction in fuel and lubricant prices (-2.5%) and the base effect associated with the increase recorded in August 2023 (9.3%)".
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