Inflation in Portugal: Recent Trends, Drivers, and Risks

July 10, 2023

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Format: Chicago

Kamil Dybczak, and Ippei Shibata. Inflation in Portugal: Recent Trends, Drivers, and Risks, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Summary

This paper examines recent trends, main drivers, and risks to near-term inflation in Portugal. Before the energy crisis, inflation in Portugal was low, often below the Euro Area average, but it accelerated quickly in the second half of 2022. Our estimated Phillips curve regression suggests that, similarly to other Euro Area countries, inflation in Portugal has been largely driven by food and external prices pressures. Inflation is projected to gradually decrease, reflecting receding energy prices and anchored inflation expectations. However, uncertainty remains high and inflation could remain elevated, especially if the inflationary process became backward looking or wage-inflation spirals are induced by pressures from energy prices.

Subject: Commodity prices, Energy prices, Inflation, International organization, Labor, Monetary policy, Oil prices, Prices, Wages

Keywords: Anchored inflation expectation, C. inflation projection, Commodity prices, Energy prices, Global, HICP inflation weight, Inflation, Inflation in Portugal, Oil prices, Pass-through, Second-round effects, Wage-inflation spiral, Wages

Publication Details

Pages:

20
Volume:

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DOI:

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Issue:

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Series:

Selected Issues Paper No. 2023/044
Stock No:

SIPEA2023044
ISBN:

9798400247309
ISSN:

2958-7875

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