Portugal’s annual inflation rate rose to 3.3% in August 2026, up from 3.0% in July, marking its highest level since April. The acceleration was driven mainly by transport prices, which increased 6.4% year-on-year, compared with 4.9% in July, largely due to higher fuel costs amid escalating tensions in the Middle East. Additional upward pressure came from miscellaneous goods and services (4.5% vs 4.1%), financial and insurance services (3.1% vs 2.6%), restaurants and hotels (6.2% vs 6.0%), and housing and utilities (3.3% vs 3.2%).
By contrast, price growth slowed for food and non-alcoholic beverages (2.1% vs 2.2%) and for recreation and culture (1.5% vs 2.4%). Core inflation, which excludes volatile components such as energy and unprocessed food, was unchanged at 2.6%. The EU-harmonized inflation rate climbed to 3.6%, its highest reading since May 2024 and well above the European Central Bank’s 2% target.
