Inflation at 2.9% in 2024? Such predictions point to it. Find out what has changed.
The inflation rate in 2024 will not be as high as previously estimated. The new information now contradicts the previously reported 3.6%, forecasting 2.9% instead. Find out what has changed and how to reorganize your monthly budget.
With inflation slowing down, it may be a good time to (re)organize the monthly budget in order to reduce expenses and put a portion of the income into savings. In the case of seeking to save on loans and insurance, credit intermediaries and insurance brokers from Poupança no Minuto find solutions for you.
The financial forecast for Portugal in 2024 is optimistic: Inflation at 2.9%
Bank of Portugal now points to inflation rate of 2.9% in Portugal in 2024, a decrease larger than previously estimated.
The projections are disclosed in the December Economic Bulletin, the institution led by Mário Centeno, and shared by Notícias ao Minuto publication.
The new forecast is that inflation will now follow a descending trajectory, with the annual variation of the Harmonized Index of Consumer Prices (HICP) currently at 5.3%, and is expected to decrease to 2.9% in 2024, and 2% in 2025 and 2026.
This information contradicts the previous forecast, which cited rates of 5.4% this year, 3.6% in 2024, and 2.1% in 2025.
But what changes for a faster decline in inflation?
Our contributions that led to an acceleration in the decline in inflation include "the decrease in production costs --- following the reversal of adverse supply shocks --- as well as an effective transmission of monetary policy," as can be read in the news.
However, the report points out that in the first three months, "temporarily higher values throughout 2024, converging to 2% in 2025." This is due to "temporary effects on prices of energy and food products," explains the publication.
In the case of energy products, these variations may reflect "the impact of the expected increase in the price of electricity at the beginning of the year and the base effects on fuels, since there should not be such a significant drop in prices in 2024 as observed in the first half of 2023".
Note also that, with the end of the zero VAT, it is expected that the rate of change in food prices will increase in January.
As for core inflation (which discounts energy and food products), the trajectory in 2024 is downward, with "the lagged effects of cost reduction and tightening of monetary policy" at stake, the news quotes. cost reduction
The forecast from the Bank of Portugal aligns with the one predicted by the European Central Bank (ECB) for the eurozone, pointing to total inflation with consistent values.
It can be an opportunity to revisit the budget.
With prices now falling and inflation slowing down, a new budget can (and should) be made. This can be a good opportunity to revisit and further control your costs.
By better organizing your financial life, you can prepare for new projects or surprises that may arise next year.
To do this, rethink all your expenses. If you want to adjust loan and insurance installments to new conditions, talk to Poupança no Minuto. Contact us to discover solutions that help you lower installments!