The inflation rate rose to 2.4% in June, the National Institute of Statistics (INE) announced this Thursday, confirming the provisional estimate released two weeks ago.
“The year-on-year change in the Consumer Price Index (CPI) was 2.4% in June, a rate higher by 0.1 percentage points (p.p.) than observed in the previous month,” reads the INE report.
The underlying inflation indicator – the total index excluding unprocessed food and energy – also recorded a variation of 2.4% (2.2% in May).
Meanwhile, the index for energy products fell to -1.3% (0.1% in the previous month) while the index for unprocessed food products accelerated for the fifth consecutive month, reaching 4.7% (4.0% in May), revealed the INE.
According to the newly released report, the monthly variation of the CPI decreased to 0.1% (0.3% in the preceding month and null in June 2024). The average variation over the last twelve months was 2.3% (the same value as the previous month).
The Harmonized Index of Consumer Prices (HICP) in Portugal showed a year-on-year change of 2.1% (1.7% in the previous month) and was higher by 0.1 p.p. than the Eurostat estimate for the Euro area (in May, Portugal’s rate was 0.2 p.p. lower than the Euro area), according to the INE.
Notably, excluding unprocessed food and energy, the HICP in Portugal reached a year-on-year change of 2.1% in June (1.6% in May), a rate lower than the corresponding rate for the Euro area (estimated at 2.4%).
The HICP recorded a monthly variation of 0.1% (0.6% in the previous month and -0.3% in June 2024) and an average variation over the last twelve months of 2.4% (the same value as the previous month).
“Target Achieved.” Inflation aligns with ECB goals in the Eurozone (what does this mean?)
The President of the European Central Bank (ECB) stated last week that the central bank’s target has been achieved after data indicated that the Eurozone inflation rate should have been 2% in June – this is the ECB’s target.
The ECB set a symmetric inflation goal of 2% in the medium term four years ago, hence positive or negative deviations from this target are equally undesirable.
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“We are at 2%, this is the target we have had and it is the projection that our team indicates for the medium term,” commented Christine Lagarde at the panel during the ECB Forum taking place in Sintra, when questioned about the Eurostat data.
The official noted that this is a “target achieved,” something that should be recognized, especially after facing “massive shocks” and now being in the disinflationary process.
However, she acknowledged there is still “a lot of uncertainty, increased fragmentation risk, and geopolitical developments of concern,” noting that these pose a dual risk to inflation, either accelerating or slowing it down.
In this context, it is necessary to “continue to be vigilant, deliver our target,” Lagarde stressed, asserting that the ECB is “in a good position for turbulent waters.”
[Updated at 11:08]
