In Portugal, the year-on-year Harmonized Index of Consumer Prices (HICP) variation was recorded at 2.7%, slightly above the Eurozone average.

Core inflation, which excludes volatile items like food and energy, remained unchanged at 2.7% for the fifth consecutive month, defying expectations for a decrease.

In January 2025, inflation in the Eurozone unexpectedly rose to 2.5% year-on-year, surpassing experts' predictions of 2.4% and marking four consecutive months of rising inflation across the 20 Euro-area countries.

This increase was primarily driven by energy prices, which accelerated from a year-on-year variation of 0.1% to 1.8%.

Despite the rise, the current inflation rate remains above the European Central Bank's (ECB) target of 2%, though the bank is optimistic about achieving this goal within the year.

Food, alcohol, and tobacco prices showed a year-on-year variation of 2.3%, down from 2.6% the previous month.

These inflation figures are harmonized across the Eurozone for consistency and comparability.

Among the major components of the HICP, services recorded the highest year-on-year variation at 4% in January, compared to 3.9% in December 2024.

In response to the inflationary pressures, the ECB recently cut interest rates by 25 basis points to 2.75%, with further reductions anticipated throughout 2025.

The highest inflation rates in January were noted in Croatia (5.0%), Belgium (4.4%), and Slovakia (4.1%), while the lowest were in Ireland (1.0%), Finland (1.6%), and Italy (1.7%).

The underlying inflation rate, excluding food and energy, has remained steady at 2.7% for the fourth consecutive month, indicating stable price increases in categories such as health and education.

Services inflation was a significant contributor, rising by 3.9% in January, although this was a slight decrease from the previous month's 4%.