In Portugal, real individual consumption (AIC) per capita – a measure that assesses the material well-being of families – was 17% below the European Union (EU) average last year, representing a two percentage point increase from the previous year . 2020. Data published this Monday by Eurostat shows that Portugal’s purchasing power has fallen to 83% in 2021.
Overall, real individual per capita consumption, expressed in purchasing power standards (PPP), ranged from 63% to 146% of the EU average across the 27 Member States.
During the same period under review, nine Member States recorded AIC per capita above the EU average. Luxembourg (46%) was the only member state where the AIC per capita was 25% or more above the EU average. In Denmark, Germany, the Netherlands, Belgium, Austria, Sweden, Finland and France, levels were 10% or more above the EU average.
Data from the European Statistical Office also show that in thirteen Member States the AIC per capita was between the EU average and 25% lower. In this category, there were significant differences between Member States: in Italy, Lithuania, Cyprus and Ireland, levels were 10% or less below the EU average, while in Slovenia, Spain, the Czech Republic, Poland, Portugal, Malta and Romania they were within 11%. % and 20% lower. Estonia and Greece were 21% and 23% below the EU average, respectively.
There are still five Member States that have registered AIC per capita 25% or more below the EU average. Croatia, Latvia, Hungary and Slovakia were 27-30% lower, while Bulgaria’s AIC per capita was 37% below the EU average.
And the GDP? Gross domestic product (GDP) per capita in 2021 also showed significant differences between member states, from 55% of the EU average in Bulgaria to 277% in Luxembourg. According to the European Statistical Office, Luxembourg’s high figure is “partly due to the large percentage of cross-border workers in the country’s total employment” who, “although contributing to GDP, are not considered part of the resident population”. which is used to calculate GDP per capita”.
Among the ten EU countries that recorded above-average GDP per capita, in addition to Luxembourg, Ireland stands out, the high level of which “can be partly explained by the presence of large multinational companies that own intellectual property.”
It adds that the contract manufacturing associated with these assets contributes to GDP, with most of the income generated from this manufacturing being returned to the ultimate owners of companies abroad.
In Portugal, the value of GDP per capita was 74% of the average for the European Union.
Inflation versus purchasing power And if in 2021 there was already a rise in prices, reducing purchasing power, then this year inflation continues to reach historical highs. In i Enrique Thomas, an analyst at XTB, even drew attention to rising inflation. “Inflation continues to be a major problem for Portugal,” the analyst began.
He added: “The truth is that Portuguese families are increasingly losing purchasing power and this could have a more serious impact on the economy in the medium term.”
For Enrique Tomé, there is no doubt that “it is a big challenge for Portugal to be able to keep the economy growing while inflation remains high. As soon as the Portuguese economy starts to show signs of slowing down and if inflation remains high, we will be seriously affected economically.”
Not much different is the opinion of Paulo Rosa, an economist at Banco Carregosa. While the Bank of Portugal estimates inflation this year at 5.9%, the economist recalls that inflation in our country “is mainly related to the supply, which is primarily affected by rising prices for fossil fuels and food products.” especially cereals and meats. This rise in prices, in his opinion, “tends to reduce the disposable income of families, reduce demand and reduce the company’s margins.”
And, in this context, “the likelihood of a scenario of stagflation, economic stagnation associated with high inflation, is increasing, and this likelihood will increase the longer and more serious the war in Ukraine and the rise in fossil fuel prices, which will increase inflation and slow economic growth. “.
Remember that economist Eugenio Rosa also warned about poverty in the country and the effects of inflation. “Inflation hurts those who have fixed incomes such as wages, pensions, etc., because they do not increase as quickly and with the same dimensionality that is observed in prices, which can increase every week, causing a loss in purchasing power,” and “beneficial to variable income holders because they can raise prices whenever they want,” he said.
The Economist also guarantees that rising prices “cause a profound degradation of living conditions, including for workers and pensioners, and a dilution of savings.”
And prices may rise. The President of the European Central Bank foresaw “undesirably high inflation” in the eurozone in the coming months, as well as a recovery in the service sector driven by tourism to support economic growth.
Food prices are rising Those who regularly go to the supermarket have already noticed that prices have risen, and Deco Proteste’s analysis leaves no room for doubt: the product group that Deco monitors weekly is now almost 20 euros more expensive than at the end of February, before the invasion. in Ukraine.
After all, the cost of a basket of essential products increased by 0.95% (1.91 euros more) in the period from June 8 to 15, reaching a cost of 203.20 euros. More than a hundred days after the start of the war in Ukraine (February 24), when Deko began this analysis, buying the same basket of products costs 19.57 euros (10.66% more).
But what products are we talking about? The basket analyzes a total of 63 staple foods such as turkey, chicken, hake, horse mackerel, onion, potato, carrot, banana, apple, orange, rice, spaghetti, sugar, ham, milk, cheese or butter.
In this analyzed week, the ten products for which Deco found the biggest increase in prices were fresh hake (17%), Carolina rice (9%), deep-frozen peas (8%), sea bass (6%), black fish. swordfish (6%), hake medallions (6%), sea bream (4%), red potatoes (4%), fish, goldfish (4%) and squash (3%).
But, looking at just the product categories with the biggest price increases between February 23rd and June 15th, vegetable oil stands out the most, with a 50% percentage increase.
