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Thursday, December 1, 2022

Inflation: Among us for some time now

A chronicle of economics, about inflation… In my country, Portugal, inflation has hit us quickly and wildly. According to DECO, the Portuguese consumer protection agency, an essential basket of food costs 12,2% more today than it did before the war (February 23). But by now, everyone knows that inflation has been around for a long time…

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João Ruy Faustino
João Ruy Faustino
João Ruy is a Portuguese freelancer who writes about European political actuality for The European Times. He is also a contributor for Revista BANG! and a former writer for Central Comics and Bandas Desenhadas.

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In my country, Portugal, inflation has hit us quickly and wildly. According to DECO, the Portuguese consumer protection agency, an essential basket of food costs 12,2% more today than it did before the war (February 23). But by now, everyone knows that inflation has been around for a long time…

Around November 2021, I was doing a story about local businesses with a colleague of mine. For the piece, we needed to interview some merchants, and so we interviewed Miss Margarida, the manager of the restaurant “O Bitoque” (bitoque is the name of a popular Portuguese dish). In the interview, she said something interesting and surprising (at the time). 

Eurozone inflation - Inflation: Among us for some time now
Eurozone inflation

So, in the interview that we did, my colleague and I wanted to answer the question, “What has been affecting local businesses in recent years?”. We were already expecting some answers. Like “pandemic”, “big chain restaurants”, etc. And we already had some notes about all those issues to then write them in the story. But when we asked that question, Ms. Margarida, talked a little about the pandemic, of course, but then, said this:

“ (After describing how the pandemic had affected local businesses) But of course we cannot forget inflation, the prices… Money is not enough for everything, as they say… And we, nowadays, notice the difference between the prices at the beginning of the year, and the prices today… There was a notable increase in the prices. Logically, if we buy things more expensively, we also need to sell them more expensively. And so we have to raise the prices of the dishes… (…) We sometimes say: ‘oh, it’s only twenty, fifty cents’. But people noticed it right away. They say: ‘this is getting more expensive by the day’. But what can we do about it? (…) This is affecting us a lot.”

Miss Margarida, current manager of the restaurant “O Bitoque”

My colleague and I were a bit startled by this statement. Of course, by November, we had already heard about some inflation in Germany and the Netherlands; however, all the Portuguese economists were saying that: one, inflation had not arrived in Portugal yet; and two, that Portugal would most likely not be affected. 

And no, the 0,9% increase in the salaries of public servants was not always about inflation. Yes, the 0,9% figure was calculated from the inflation figure at the time of the 2022 State Budget (the first draft of this document, the one that wasn’t approved by the Assembly of the Republic). But a raise in the salaries of public servants was already a long time promise of the Socialist government and their left-wing supporters. 

Economists say that inflation in Portugal only started with the war (or that it, at least, was minimal before the war), but I disagree. It had already been affecting local businesses for some time, I would say, for at least September/October. 

Soon after the interview, I started noticing stories about inflation in Portuguese newspapers. I remember one about inflation in grain and bread only one week after the interview, in the Portuguese newspaper “Diário de Notícias”.Of course, I rushed to my colleague to show him how the manager was right. The story said that the price of grain could potentially increase 50%(!). This was months before the war. 

At the same time as the election (in January), the economic specialized newspapers couldn’t stop talking about inflation and how it was getting worse in other countries. But had not yet reached Portugal. The generalist newspapers continued to mostly ignore the issue.

And then the invasion… Only a week after the stories about frontlines, sanctions, and whatnot… It was here, inflation had finally arrived in Portugal. 

Many Portuguese have never experienced this level of inflation, because they are already accustomed to the euro. But many others, not only remember but fear inflation, as they experienced it in full force during the post revolutionary years.

My colleague and I have never experienced inflation. We would normally get some kebabs or other street foods for about €1 or €2, now, that’s basically impossible. We now have to search for the restaurants least affected by inflation, or the rare ones that still haven’t been affected by it. 

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