Food prices 23% above EU 2021 average

Despite a slowdown in inflation on the prices of goods and services in Portugal, food prices continue to be high at 23% above the average price levels of 2021.

According to Portugal’s national statistics institute INE in the case of food prices: “These are 23% above the average prices level in 2021 despite a signifiant like-for-like reduction”.
In May they were 9.4% higher when in the previous month the variation on April 2022 was 15.4%. This means that an average family who spent €100 on a shopping basket in May 2021 spent €123 in May 2023 for the same products.
In the case of energy products, these also continued to be higher than the 2021 average, despite a negative variation “that is likely to continue as a direct consequence of the base effect”.
The INE emphasises that “in relation to energy products, prices fell in the second half of 2022, followed by a period of relative stabilisation with prices in May 2023 at 5.8% above average 2021 level”.
Regarding general inflation, this is also above pre-war levels. “Despite a slowdown in the Consumer Price Index (IPC), the average level of prices is above that of last year. In May 2023 it was 12.4% higher than the average level of prices in 2021”.
And in order for prices to return back to pre-war levels, the INE indicates there would have to be a period of negative like-for-like variation rates which is unlikely to happen anytime soon.
The INE says that the behaviour of prices in 2022 will have a relevant influence on the evolution of inflation in 2023, and excluding a new geopolitical or financial shock, there is likely to be a progressive fall in the like-for-like IPC variation rate as a result of the sharp increases seen in the second quarter of 2022 (monthly variations of 2.2%, 1.0% and 0.8% in the months of April to June).
The INE states that the greater the difference between the IPC of a current month and the same month the year before, the greater the inflation variation rate will be. But this disparity is likely to increasingly narrow over the coming months and this behaviour will be more visible for those product categories that most increased in price over the past 18 months: foodstuffs and energy.