The basic food basket is going up to its highest value ever, increasing by 20 euros in a week, 63 more than last year. Rents, electricity, telecommunications and various forms of public transport are also going up.
The basic food basket that Deco Proteste has been analyzing will rise in price from 250 euros to 270. On the one hand, “zero VAT” ends on January 5, the measure that temporarily cut the tax on 46 products considered essential, resulting in an increase of 6%, on the other hand there is a “generalized price update of several products” that is customary in January of each year.
The characterization comes from Expresso (link is external), which in its weekly edition reviews these price rises and also uses the expression “new historic record” to refer to the level reached by this basic food basket.
Compared to January 2023, the increase will be 63 euros. However, Deco Protesto also makes a critical analysis of zero VAT, explaining that there has never been “a full pass-through of the benefit” to consumers. At the time it was applied, for example, goods no longer paid 6% tax but prices only fell by an average of “only 3.36%”. Despite noting some restraint in price rises, the consumer association also reports that from September onwards they “resumed their rise”. So, this week, when the measure is coming to an end, prices are higher than they were when it was applied and “there are even products that are much more expensive today than before VAT was removed, with rises of more than 25% and 30%, as is the case, for example, with oranges, broccoli and olive oil”.
Interviewed by the same newspaper, Gonçalo Lobo Xavier, director-general of the super and hypermarket employers’ group, the Portuguese Association of Distribution Companies, confirms the rise and estimates that there will be an “increase of more than 10%”, 5% of “updated” prices added to the 6% of the VAT increase. However, “there are products that will increase more. Olive oil, for example, could rise by more than 15%”. For him, these increases “reflect the rise in all production costs, inevitably imposing an increase in final prices”, but they won’t be felt immediately because the products that are currently priced at the same level need to be disposed of first.
The same level of more than 10% and the same slogan of “inevitability” is also part of the speech by another representative of the bosses, Luís Mira, secretary-general of the Portuguese Farmers’ Confederation. For him, “there is no alternative to price rises when all the factors of production increase, such as electricity, transport or tolls”. He also blames the increase in the minimum wage because it would “increase costs throughout the chain, from producers to industry and distribution”.
And there are many more price increases
This rise in food prices isn’t the only bad news for workers on New Year’s Eve. For example, house rents, electricity, telecommunications and some forms of public transport are going up.
Público (link is external) diagnoses these rises, starting with house rents, which could be increased by nearly 7% in accordance with the rules of the New Urban Lease Regime, which links these increases to the average change over the year, measured in August, in the price index after housing prices have been removed. This figure of 6.94% translates into an increase of 6.94 euros per hundred euros of rent. This means that a rent of 500 euros could rise to 534.7 euros, the newspaper explains.
A “traditional” price rise is that of telecommunications, which will follow the 2023 Consumer Price Index and will take place at the beginning of February.
The regulated electricity tariff will rise by 3.7% in January, a cost that will hit the 900,000 customers who are on this system. The newspaper gives the following examples of the increase: “a couple without children will pay an average of 1.05 euros more than in December and a couple with two children will see an average increase of 3.27 euros”.
The fees applied by ANA to airlines are rising above inflation: at Lisbon airport by an average of 12.45%, at Beja by 8.77%, at Madeira by 7.92%, at the Azores by 7.47%, at Faro by 7.41% and at Porto by 7.39%. These rates then have an impact on consumer prices.
Bank commissions could also become more expensive. Novo Banco, at least, has already announced a rise in the cost of various services as of January 8th.
Water and sanitation depend on each municipality, but there are known increases of 4.2% in Tomar and Sardoal, 3.3% in Torres Vedras, 3.3% in Leiria and 5.36% in Coimbra.
In the case of public transport, passes will remain at the same cost in Lisbon and Porto but Carris will increase ticket prices by ten cents, in the metro a ticket will cost 1.80 and in Porto tickets will increase by 6.43%. The same increase will be applied by CP.
Tolls, meanwhile, will rise by at least 2.04%.