In March, the inflation rate in Portugal was 2.3%, while in the Eurozone it stood at 0.8%, according to an Eurostat Flash Estimate.
Among the 20 countries in the bloc, Portugal had the highest price increase in March. In year-on-year terms, Portugal's inflation rate in March was also higher than the Eurozone average, rising by 2.6% compared to March 2023, which compares with an average year-on-year rate of 2.4% in the Eurozone. Still, Portugal remains at number 11th with the highest annual inflation rate within the Eurozone.
Experts said this rise in March owes to food prices which, according to data from the National Statistics Institute (INE), recorded a monthly increase of 0.86% (processed food) and 0.28% (unprocessed food), after having seen a price correction in February.
Meanwhile, a study published this week by the Bank of Portugal (BdP) concluded that the Zero VAT policy that the Government introduced to mitigate the effects of inflation was effective.
The measure, which came into force in April 2023, ended earlier this year and applied to a number of essential goods. The study states that, initially, the announcement of the measure led to an "early adjustment of prices", with an increase of 1.27%.
Even so, its objectives were met: the prices paid by consumers were lower than inflation, and supermarkets in general did not take advantage of Zero VAT to increase the price of food.
The almost complete drop in prices contradicted the Finance Minister's fears, since before the measure came into force, Fernando Medina feared that the tax cut would only increase retailers' margins.
The BdP study proves that consumers benefited from the tax reduction.