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 year-on-year inflation rate in January was 2.5%, 0.5% lower than the previous month. The data comes from the National Institute of Statistics (INE) and was reported by Notícias ao Minuto.  

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

As for the underlying inflation indicator, which excludes products with more volatile prices, such as raw food and energy, recorded 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 for energy products slowed down to 2.4% (4.9% in December), "reflecting the base effect of electricity prices".

Regarding the variation of the index for non-food processed products fell to 1.8%, having been 3.4% in December.  

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

In the last 12 months, INE indicates 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 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 stood at 2.5% in January 2025, compared to 2.8% in the same month of the previous year, but still exceeding the 2.4% from December 2024, according to Eurostat - as reported on Notícias ao Minuto. Source: 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 products (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 elements like alcohol and processed food) recorded 2.7% in January, stable month-over-month, and lower than the 3.3% in the same month.

In the Eurozone countries, Croatia (5.0%), Belgium (4.4%), and Slovakia (4.1%) had the highest inflation rates - according to the Harmonized Index of Consumer Prices (HICP). In contrast, Finland (1.6%), Italy and Malta (1.7%), and France (1.8%) had the lowest inflation rates.

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