Image: BARBARA GINDL (APA)
This measure is part of an agreement signed with producers and retailers with the aim of stabilizing prices as soon as possible. Among other things, financial support for farmers is planned. The package of measures will cost the state around 600 million euros, said Prime Minister António Costa.
The suspension of VAT on food such as bread, pasta, rice, cow’s milk, eggs, yoghurt, cheese, oil, butter, meat and fish will initially apply for six months and may be extended. The package of measures must be approved by Parliament. But the government has a majority there.
Inflation just over eight percent
In Portugal, the inflation rate was 8.2 percent in February. It was thus similar to that in Germany, where consumer prices in February were 8.7 percent higher than in the same month last year. In Portugal, however, many people have less leeway when it comes to spending due to significantly lower salaries. The price of food in the country was recently even 20.1 percent. The sales tax on most groceries is six percent.
Costa attributed the strong inflation primarily to the Russian war of aggression in Ukraine. He warned that it cannot be ruled out that the price increase will not continue after the package of measures has come into force. “No one knows how long this war will last, and as long as it lasts there is a risk that production costs will continue to rise,” he said in Lisbon on Monday evening.
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