WORKERS LOSE OUT AS INFLATION BITES
For the ninth year running the government has underestimated the direct affect of the inflation rate on the real earnings of private workers and civil servants alike. Figures published this week by the Institute for National Statistics (INE) confirmed the inflation rate for 2006 to have been 3.1 percent, up considerably from the previous year’s figure of 2.3 percent, which is exactly the same figure the government said inflation would be in 2006. Despite consistently failing in its forecasts since 1997, the government is sticking to its 2.1 inflation rate prediction for 2007.
The higher than anticipated consumer price index for 2006, which excludes housing costs and council tax, has seen millions of Portuguese workers lose buying power.
Rising fuel bills, soaring tobacco and liquor prices along with parents being asked to spend 5.2 percent more on education costs, have seen inflation top the three-percent barrier for the first time since the country was in the midst of a mini-recession.
Had it not been for a 0.9 percent average drop in communication charges, the consumer price index would have possibly climbed an additional tenth of a percentage, analysts argue.
But despite the soaring inflation rate, the government is remaining optimistic, saying the figure should drop with the expected fall in fuel costs in 2007.
In the meantime, analysts have confirmed that at least half the country’s workforce has lost out financially due to the government’s persistent miscalculations. COURTESY OF THE PORTUGUESE NEWS