Portugal's essential food basket has reached an all-time high of €254.12, according to the Portuguese Association for Consumer Protection (DECO). This represents a significant increase of over 5% since the beginning of the year and more than 35% compared to early 2022.
DECO spokesperson Nuno Pais de Figueiredo stated that the current price surge cannot be directly attributed to events in the Middle East, noting that comparable increases have occurred previously during their monitoring period. Products experiencing the most substantial price hikes this month include tuna in vegetable oil (up 33%), frankfurters (up 20%), and spiral pasta (up 12%).
Economist Filipe Garcia from Financial Market Information (MFI) suggests that current price increases may be speculative, as there is no immediate justification for them, such as shortages of goods or transport resources. However, he cautioned that rising fertilizer costs and fuel prices could lead to future price increases. The reliance on lorries for over 90% of goods transport in Portugal means that sustained high fuel prices will inevitably impact costs.
Garcia also highlighted the potential impact on electricity production, as increased natural gas prices directly affect companies that rely on it for non-renewable energy generation. He warned that prolonged conflict could also affect Portuguese exports, particularly in construction materials, and might prompt the European Central Bank to consider raising interest rates if inflation surges.
While geopolitical uncertainty can create economic challenges, Portugal might see a benefit in tourism, as security concerns in competing destinations could draw more visitors. Experts are urging consumers and competition authorities to remain vigilant against potentially opportunistic price increases, drawing parallels to the aftermath of Russia's 2022 invasion of Ukraine where some price hikes were deemed unjustified.