Portuguese official inflation slows in April

Portuguese 12-month inflation was 0.2 percent in April and prices were steady in the month compared with the level in March, the national statistics institute Ine reported on Monday.

In March, inflation was 0.5 percent and prices rose by 1.7 percent.

The Portuguese government, which signalled on Sunday that it had reached agreement with the International Monetary Fund and European Union on new radical action to correct public finances, including steep tax increases, has forecast that inflation for the whole year will be 0.7 percent.

Portugal has to satisfy strict audit conditions laid down by the IMF and EU in order to receive successive slices of rescue funding totalling 78 billion euros ($101 million) and granted in May 2011, with the aim of reforming the economy and enabling the country to borrow on capital markets in the normal way.

Prices were pushed up in April by a 2.0-percent rise in the price of food and of 2.7 percent for the prices of water, electricity, gas and other fuels.

But the prices of transportation and of clothing fell.

The harmonised price index, permitting comparison with other other countries in the eurozone, showed an increase of 0.4 percent over 12 months. For the whole of the eurozone, prices rose by 1.2 percent.