{
  "title": "Portugal: Selected Issues",
  "publication": "IMF Staff Country Reports, June 22, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/06/21/portugal-selected-issues-535043",
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  "summary": "This Selected Issues paper reviews inflation in Portugal, recent trends, drivers and risks. While below average euro area (EA) levels, inflation has been strongly correlated with the rest of the EA.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Title: Portugal: Selected Issues\n- Publication date on landing page: June 22, 2023\n- Series: IMF Staff Country Reports 2023, 219\n- Pages: 51\n- DOI: https://doi.org/10.5089/9798400246104.002\n- ISBN: 9798400246104\n- ISSN: 1934-7685\n- Subject tags provided: Employment, Financial institutions, Housing prices, Inflation, International organization, Labor, Labor markets, Monetary policy, Mortgages, Prices\n- Keywords provided: aggregate labor market dynamics, C. inflation projection, Employment, employment share, Europe, Global, HICP inflation weight, Housing prices, Inflation, Labor markets, Mortgages, wage-inflation spiral"
    },
    {
      "heading": "Inflation dynamics and drivers (findings)",
      "content": "- Inflation in Portugal has been below average euro area (EA) levels but strongly correlated with the rest of the EA.\n- Inflation picked up slowly in 2022H1, reflecting delayed pass through from international commodity prices to headline inflation, and accelerated quickly in 2022H2.\n- Inflation in Portugal is determined by similar factors as in other advanced economies (AE) countries."
    },
    {
      "heading": "Model-based forecasts, sensitivity analysis, and scenarios",
      "content": "- The analysis provides a model-based forecast of headline and core inflation using assumptions from the January 2023 World Economic Outlook.\n- The paper conducts sensitivity assessment, including evaluation of risks of developing a sustained wage-price inflation spiral under current circumstances.\n- Simulations analyzing potential risks indicate:\n  - Inflation could increase further with shocks.\n  - Under most scenarios, inflation would remain on a downward trend."
    },
    {
      "heading": "Projections and outlook",
      "content": "- Inflation in Portugal and other AEs is projected to decline gradually in 2023 and 2024.\n- Analysis on inflation processes suggests that inflation in Portugal has likely peaked, though some upside risks should not be ignored."
    },
    {
      "heading": "Policy-relevant implications (drawn from the analysis)",
      "content": "- Monitor wage developments for risks of a sustained wage-price inflation spiral.\n- Use model-based forecasting and sensitivity analysis to assess the impact of international commodity price pass-through and other shocks.\n- Maintain attention to synchronization with euro area inflation dynamics given strong correlation with the EA.\n\nInternational Monetary Fund. Portugal: Selected Issues, IMF Staff Country Reports 2023, 219 (June 22, 2023).\n\n---\n\n Content in this bundle\n\n- Portugal: Selected Issues; IMF Country Report No. 23/219; June 1, 2023\n  - Portugal: Selected Issues; IMF Country Report No. 23/219; June 1, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Portugal: Selected Issues; IMF Country Report No. 23/219; June 1, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 22, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400246104.002",
    "Title: Portugal: Selected Issues",
    "Publication date on landing page: June 22, 2023",
    "Series: IMF Staff Country Reports 2023, 219",
    "Pages: 51",
    "DOI: https://doi.org/10.5089/9798400246104.002",
    "ISBN: 9798400246104",
    "ISSN: 1934-7685",
    "Subject tags provided: Employment, Financial institutions, Housing prices, Inflation, International organization, Labor, Labor markets, Monetary policy, Mortgages, Prices",
    "Keywords provided: aggregate labor market dynamics, C. inflation projection, Employment, employment share, Europe, Global, HICP inflation weight, Housing prices, Inflation, Labor markets, Mortgages, wage-inflation spiral",
    "The analysis provides a model-based forecast of headline and core inflation using assumptions from the January 2023 World Economic Outlook.",
    "The paper conducts sensitivity assessment, including evaluation of risks of developing a sustained wage-price inflation spiral under current circumstances.",
    "Simulations analyzing potential risks indicate:",
    "Analysis on inflation processes suggests that inflation in Portugal has likely peaked, though some upside risks should not be ignored.",
    "Monitor wage developments for risks of a sustained wage-price inflation spiral.",
    "Use model-based forecasting and sensitivity analysis to assess the impact of international commodity price pass-through and other shocks.",
    "Maintain attention to synchronization with euro area inflation dynamics given strong correlation with the EA.",
    "**Portugal: Selected Issues; IMF Country Report No. 23/219; June 1, 2023**"
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