Funcas forecasts a final rise in the headline inflation rate in November


The Savings Banks Foundation (Funcas) wait a headline inflation rate pick up in november and forecasts that the annual average for this year it will be 8.6% and that of 2023, 4.7%. The average rates for the underlying index will be 5.1% and 4% this year and next, respectively. Thus, in the central forecast scenario, with a stable oil at 95 dollars and a favorable evolution of the Mibgas price, Funcas foresees an increase in the general inflation rate in November, to closing the year at 7.1% and start from that moment on a downward trend.

According to the data confirmed this Tuesday by the National Institute of Statistics (INE), the CPI rose 0.3% in Octoberwell below the 1.8% growth registered in the same month last year, which has reduced the inflation rate by 1.6 percentage points, up to 7.3%. Core inflation held steady at 6.2%.

As explained by the Foundation through a statement, the result of the general index, lower than expected, is due to a step effect on energy products, coupled with a significant drop in their prices. In particular, the energy inflation rate has been reduced from 22.4% to 8%. The step effect has been especially pronounced in electricity, since in October last year its price increased by 10%, while this year it has fallen by 22.5%.

All in all, Funcas’ central scenario is that inflation closes the year at 7.1%, starting from that moment on a downward trend. The annual average for this year will be 8.6%, and for 2023 4.7%, while the average rates for the underlying index will be 5.1% and 4% this year and next, respectively.

In an alternative scenario in which the gas price exceeds that discounted in futures by 20%, Funcas proposes that the interannual growth rates of the general and core CPI in 2023 would stand at 5.4% and 4.4% respectively. In another scenario in which the gas price was 15% lower, these rates would be 4% and 3.7% respectively.


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