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Dining out, sleeping in a hotel, collecting rubbish, drinking or smoking: the prices that rose the most this year

Between December last year and June this year, inflation in Portugal rose 2.7%. In services, the segment that has been keeping central banks up at night, was where there was a greater increase in prices, with restaurants and hotels becoming more expensive.

According to the calculations of the Express, based on the report released this Tuesday by INE (National Institute of Statistics), the price of services in this period increased by 4.3%. This indicator has received the attention of central banks around the world, especially the European Central Bank and the United States Federal Reserve, since its resistance is linked to the increase in citizens’ salaries. More money available at the end of the month can encourage greater spending on activities such as dining out or traveling more. And this undermines efforts to combat inflation.

In this segment, the variation in accommodation prices stands out (+44%). And here only the expenses of Portuguese citizens are included. The indicator that accumulates what foreign tourists spend on national soil is not measured in the IPC (consumer price index), but rather in the IHPC (harmonized consumer price index), which serves as a comparison. European section. The price of restaurants and cafes increased by 3.8%.

Prices of services rose the most this year

Variation in inflation between December 2023 and June 2024 (in percentage)

Within each segment, it is also possible to understand price variations in detail. Inflation of energy products, for example, increased by 3.6% in six months, but electricity became even more expensive (10%), while gas depreciated (-5.1% ). Looking at the expenses that the Portuguese have at home, there is another indicator that stands out: garbage collection, the price of which rose 11.8% between December and June. Rents rose 4.8% in this period.

The price to buy furniture or appliances for the home has decreased in these six months, while home maintenance services have become more expensive. Overall, inflation relating to accessories and home works fell by 1.21%, along with clothing and footwear (with a reduction of 0.11%) , the only ones, among 12 subgroups, to be cheaper.

In the State Budget proposal for 2024, the Executive expects to obtain an additional 8.9% of revenue from these indirect taxes, totaling 33.4 billion euros, on the back of increases in the Tobacco Tax (IT) , which affects 1.5 million smokers, in the Tax on Alcohol, Alcoholic Beverages and Beverages with Added Sugar or Other Sweeteners (IABA), in the Single Circulation Tax (IUC) and the champion of all, the IVA.

Accommodation prices have soared in Portugal

Biggest rises and falls in inflation between December 2023 and June 2024 (in percentage)

Year-on-year inflation fell in June

As regards year-on-year inflation in June – which compares with the index for the same month of the previous year – there was a decrease of 3 percentage points to 2.8%, after an increase in May (and the North American singer Taylor Swift may have been guilty in the registry office). This does not mean that prices fell, but rather that they rose less intensely.

INE explains that contributing to this slowdown were food and hotel prices, which grew at a slower rate compared to May (5.9% to 4.1%) and fresh food prices , which eased from 2.5% to 1.8%.

Year-on-year inflation falls in June and approaches the ECB target

Year-on-year variation in the consumer price index (in percentage)

On the other side, driving inflation, were energy products, with a year-on-year rate of change of 9.4%, compared to 7.8% in the previous month.

Source

Francesco Giganti

Journalist, social media, blogger and pop culture obsessive in newshubpro

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