Inflation falls to 2.5% in Portugal and the Eurozone in January.

Inflation rates slow down in Portugal and in the eurozone in January.

In Portugal, the annual inflation rate in January was 2.5%, 0.5% less than the previous month. The data is from the National Statistics Institute (INE) and was released by Notícias ao Minuto.  

According to the INE, "this slowdown is partly explained by the base effect associated with the end of the VAT exemption on a set of essential food items and the increase in electricity prices, observed in January 2024".

Regarding the core inflation indicator, which excludes products with more volatile prices such as unprocessed food and energy, it registered a variation of 2.6% in January, 0.2 percentage points less than the previous month (2.8%).

In addition, the variation in the index related to energy products decelerated to 2.4% (4.9% in December), "reflecting the base effect of electricity prices".  

Regarding the variation of the index related to processed non-food products it fell to 1.8%, after being 3.4% in December.  

Compared to the previous month, the variation of the CPI was -0.5%, compared to 0.1% in December and no variation in January 2024.  

In the last 12 months, the INE points to an average variation of the index of 2.4% (a value similar to that of the previous month).

The Portuguese Harmonized Index of Consumer Prices (IHPC), the indicator that allows for comparison with other European countries, recorded a year-on-year variation of 2.7% in January (3.1% in December).

In the euro area, the annual inflation rate of the euro area settled at 2.5% in January 2025, compared to 2.8% in the same month of the previous year, but still exceeding the 2.4% of December 2024, according to Eurostat - as reported on Notícias ao Minuto.

Statistical service data also reveal that, looking at the main components of inflation in the euro area, it is expected that services will have the highest annual rate in January (3.9%, compared to 4.0% in December), followed by food, alcohol and tobacco (2.3%, down from 2.6% in December), energy (1.8%, compared to 0.1% in December) and non-energy industrial goods (0.5%, stable compared to December).  

Core inflation (excluding more volatile items like alcohol and processed food) registered 2.7% in January, stable compared to the previous month and lower than the 3.3% from the same month last year.

In the countries of the eurozone, Croatia (5.0%), Belgium (4.4%), and Slovakia (4.1%) presented the highest inflation rates as per the Harmonised Index of Consumer Prices (IHPC). In contrast, Finland (1.6%), Italy and Malta (1.7%), and France (1.8%) had the lowest inflation rates.

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