The annual rate of inflation rebounded in October to zero, leaving the first time in eight months to register negative values.
According to data released Wednesday by the National Statistics Institute (INE), the variation of the index of consumer prices was nil compared to the same month last year. This result represents an increase of 0.4 percentage points in the inflation rate, which was in negative territory since February.
The average inflation rate for the twelve months also rose but remained negative, from -0.3% to -0.2%.
For classes of goods and services, which explains the increase recorded in the annual variation is especially the fact that the variation in prices of food products and beverages non-alcoholic to have become less negative than in the previous month by 0.3 percentage points.
The most negative contribution to inflation comes from the class of clothing and footwear, which features the largest price falls face to last year. The largest contribution comes from the upward class Housing, water, electricity, gas and other fuels.
According to the INE, the core inflation index, which removes the analysis products with price changes more volatile food as unprocessed fuels and recorded a rate of annual change of 0.2%, against 0.1% the previous month.
The rate of inflation very low levels in Portugal that has been observed during the present year is seen on the one hand, as a natural consequence of reducing business costs, representing a gain of competitiveness to face the foreign country and helping families who have seen the their wages stagnate or even decrease.
However, on the other hand, there is the risk of the economy into a deflationary process, in which the decline extended prices affects the expectations of businesses and individuals, creating a cycle consecutive postponement of decisions on consumption and investment.
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