The year-on-year inflation rate is estimated to have increased to 2.4% in June, up by 0.1 percentage points from the previous month, according to a rapid estimate released this Monday by the National Statistics Institute (INE).
“Based on the information already gathered, the year-on-year variation rate of the Consumer Price Index (CPI) is estimated to have risen to 2.4% in June 2025, a rate 0.1 percentage points (p.p.) higher than observed in the previous month,” the INE report states.
The core inflation indicator – total index excluding unprocessed food and energy products – is also estimated to have recorded a variation of 2.4% (2.2% in the previous month).
“The variation in the index for energy products decreased to -1.3% (0.1% in May 2025) while the index for unprocessed food products is estimated to have accelerated again to 4.7% (4.0% in the previous month),” it is further noted.
The rapid estimate released today by the national statistics authority also indicates that, compared to the previous month, the CPI variation is estimated to be 0.1% (0.3% in May and zero in June 2024).
Over the last 12 months, INE estimates a variation of 2.3%, identical to that recorded in the previous month.
As for the Portuguese HCPI (harmonized consumer price index), it is estimated to have registered a year-on-year variation of 2.1% (1.7% in the previous month).
The definitive data concerning June’s CPI will be published by INE on July 10.
Reduction of Inflation to 2% “Practically Complete”
The European Central Bank’s (ECB) chief economist, Philip Lane, stated that the process of reducing inflation to 2% is practically complete, despite ongoing pressure points.
“While headline inflation is currently close to the target, services inflation still has a long way to go,” Lane said at a conference in London today.
“Nonetheless, sufficient progress has been made in reducing inflation to the [2%] target to consider this monetary policy challenge practically complete,” he added, as reported by Bloomberg.
This analysis by the ECB allows the institution to postpone further key interest rate cuts, currently at 2.0%, after eight reductions since June 2024.
However, the organization’s prospects face risks due to the impacts of U.S. tariffs and conflicts in the Middle East, with the negotiations between the U.S. administration and the European Union (EU) having a deadline of July 9.
ECB President Christine Lagarde said on Monday that with rates at their current levels, the bank is well-positioned to deal with uncertainty, acknowledging that tensions in the Middle East are a concern given the potential for energy supply disruptions and price turmoil.
Now, Lane noted that the task of disinflation has been replaced by a new set of challenges to ensure the medium-term goal is protected from factors that include “high uncertainty” regarding the future of international trade, reports Bloomberg.
“I think volatility is partly related to policy uncertainty about the future of the international trade system,” he added, pointing to the possibility of a wider set of non-tariff barriers, deeper intertwining of economic and security policies, and possible revisions to the treatment of foreign investors.
[News updated at 11:23]
