The Savings Banks Foundation (Funcas) has worsened its average inflation forecasts for 2022 this Friday, raising this rate to 7%, two tenths more than in the previous estimate, while it expects that in the month of December the year-on-year rise in prices stood at 4.8%. In the month of April, the BdE made an average forecast of 7.5%.
This will be the central scenario proposed by Funcas, with oil around 105 dollarsafter this Friday, the National Institute of Statistics (INE) has placed April inflation at 8.3%, one tenth less than the initial estimate.
As for core inflation (which does not include energy or unprocessed food prices), the INE has placed this rate at 4.4% in April, one point more than in March. In contrast, the general inflation rate has fallen from 9.8% in March to 8.3% in April.
rise in underlying inflation
In this sense, Funcas predicts that the annual average for underlying inflation could be 4.6% (1.1 points more than his previous estimate). For 2023, an average annual rate of 3.1% in the general and 3.6% in the core is predicted.
The drop in inflation in April, in Funcas’ opinion, was due to the decline in energy products, as a result of the drop in electricity and fuel, and supported also at the end of a step effect due to the strong increase recorded in the same month last year.
An unstoppable rise
“But inflation in the rest of the CPI components continues to rise, due to the intensification of the transfer to final consumer prices of the increase in production costs. Thus, in April, the number of CPI subclasses with an inflation rate higher than 4% was 106, compared to 94 the previous month and 14 in April 2021,” Funcas warned.
The general average rate of inflation would be 7.9% and 4.8% this year and next
Beyond the central scenario proposed by Funcas, in an alternative context in which the price of oil rises to 120 dollars, the general average rate of inflation would be 7.9% and 4.8% this year and next, respectively. And in a scenario in which the price of crude drops to 90 dollars, the average annual rates would be 6.5% and 1.5%.