In the October economic bulletin, the BdP outlines the uneven impact that rising inflation can have on households, disaggregating the composition of household expenditure by income quintile and age group.
In the analysis of the banking regulator, it appears that the differentiated impact is linked to the evolution of the prices of the different goods and services and their weight in consumption of each family.
"The fact that the high inflation estimated for lower-income families predominantly results from the evolution of prices of essential goods, with inelastic demand, has more severe implications than the same inflation for higher-income families, which reflects a greater contribution of goods and services whose consumption can be more easily substituted or postponed", explains the BdP.
The institution led by Mário Centeno also points out that in the face of a negative shock in purchasing power, "lower income families have a more limited ability to smooth consumption, given that they have a lower savings rate and have less wealth".
" Inflation hitting low income families hardest", outstanding insight from the Bank of Portugal!
By Greg from Other on 08 Oct 2022, 11:32
What a revelation the most stupid of comment I have ever read, maybe the statement goes with that Portugal will have a booming and no inflation economy next year
Please wake up.
By Graham from Porto on 08 Oct 2022, 13:19