In recent months, the year-on-year rate of change of consumer food prices continued to increase, standing at 19% in February 2023, 3.9 pp above the value observed in the euro area. 

This differential can be broken down into two effects for each item in the food basket of the consumer price index: a price effect, which captures the contribution arising from differences in price changes between Portugal and the euro area, and a structure effect, which measures the contribution of the difference in the weight of the item in the baskets of the two economies. 

Unprocessed food contributed the most to the inflation differential vis-a-vis the euro area in February 2023 (3.2 pp). Price effects were significant in this group of goods, particularly in fruit, vegetables and meat. The contribution of processed goods was smaller, with price effects in some items being partially offset by negative structure effects in others.

For more details, see Box 2 "Food price developments and differential vis-à-vis the euro area" of the March 2023 issue of the Economic Bulletin of Banco de Portugal.

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