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External inflationary pressures largely explain the consumer price increase in 2021


The scarcity and sharp rise in the prices of raw materials and some intermediate goods at international level, as well as the rise in transport costs, have led to an increase in the prices of Portuguese imports in the recent past. This type of shock creates pressures along the production and distribution process and is reflected in producer and consumer prices.

The size and time profile of the transmission of these pressures can be analysed using a model that approximates the inflationary process along the production and distribution chain. Results suggest that the effects of the oil price shock on the HICP are essentially the direct ones via the energy component (which weighs around 8% on the total HICP), i.e. the indirect impacts on the remaining prices are limited. The impact of a shock on the import deflator excluding energy has a considerably higher magnitude. Based on these results, it is possible to estimate that shocks in oil prices and in the non-energy import deflator contributed around 0.6 percentage points to the 0.9% increase in the HICP in 2021.

For more details see Box 7 "The pass-through of external inflationary pressures to producer and consumer prices in Portugal" of the Economic Bulletin of May 2022.

Prepared by Cátia Silva and Sara Serra. The analyses, opinions and results expressed here are the sole responsibility of the authors and do not necessarily coincide with those of Banco de Portugal or the Eurosystem.

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