Inflation measured by the consumer price index (CPI) increased significantly throughout 2022, reaching a maximum in October (10.1%) and declining to 9.6% in December. The CPI is a comprehensive measure of the price changes of goods and services commonly consumed by households, being based on the average expenditure structure of the population. However, the rise in inflation may have an uneven impact, reflecting the different evolution of the prices of the various goods and services and their weight in the consumption basket of each household.

Inflation estimates for households in different income quintiles - obtained using the expenditure structure of each group - were quite close until October 2022. In November and December, in contrast to the decline in the year-on-year rate of change of the CPI, inflation estimates for the lowest income quintiles remained at high values. This reflects the higher weight of food and housing costs (including energy) in the consumption basket of households in these quintiles and the maintenance of more marked changes in the prices of this type of goods. Estimated inflation for households in the lowest income quintile was 10.4% in December, while for those in the highest income quintile it was 9%. 

For more details, see Box 6 "Inflation estimates by income level and age group" of the October 2022 Economic Bulletin of Banco de Portugal.

Prepared by Carlos Melo Gouveia and Cristina Manteu. The analyses, opinions and findings expressed herein 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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