Inflation rises in Portugal, but slows down in the Eurozone: See what changed in May.

Inflation in Portugal accelerates again in May.

According to the quick data released by the National Institute of Statistics (INE), on Notícias ao Minuto, the yoy inflation rate in Portugal rose to 2.3% in May 2025, an increase from the 2.2% recorded in April.

This increase is largely due to the evolution of prices in the energy and food sectors. In particular, the Consumer Price Index (CPI) recorded more significant increases in these groups, directly impacting the cost of living for Portuguese people.

Food product prices are rising again.

Core inflation - which excludes energy and unprocessed food products - settled at 2.4% in May, remaining stable compared to the previous month. However, the index for unprocessed food products rose significantly again, with a year-on-year variation of 2.1%.

These data indicate that the Portuguese continue to feel the effects of inflation especially in the supermarket, where prices continue to not give respite.

Inflation in the Eurozone slows to 1.9%: Good news for the ECB.

In contrast to the national trend, Eurostat data cited in Notícias ao Minuto shows that the inflation rate in the Eurozone dropped to 1.9% in May 2025, from 2.4% in April. This decrease puts inflation below the European Central Bank's (ECB) 2% target for the first time in over two years.

This slowdown is seen as a positive sign, being able to influence future decisions of the ECB regarding interest rate policy, namely a possible decrease already at the next meeting.

Difference between Portugal and Europe: What explains?  

The divergence between inflation in Portugal and the Eurozone can be explained by various factors.

• The local impact of energy prices  

• The dynamics of the Portuguese food market;  

• Unequal economic recovery among countries.

Despite the European slowdown, the persistence of inflation in Portugal may continue to put pressure on consumers and businesses, especially in more vulnerable sectors.

What to expect in the next months?

If the trend of European slowdown continues and the ECB decides to lower interest rates, this could have positive effects in Portugal, namely:

• Reduction in housing credit installments. Available at: Link.

• Stabilization of prices in the markets.

• Increase in the purchasing power of families.

However, as long as internal inflation continues to rise, the Portuguese should pay attention to the budget and search for ways to save, especially on essential goods.

To do so, follow the Poupança no Minuto to stay up to date with all savings tips, whether in daily life or with your credit and insurance products! Follow us or contact directly with a credit intermediary or insurance broker, for free help: