Summary
In the Euro Area (EA), the economic sentiment and the consumer confidence indicators maintained in June the downward movement observed since August 2007. In the same month, the oil price and the raw materials price index continued to register high year-on-year growth rates.
On the domestic side, the economic climate indicator, available up to June, and the economic activity indicator, available until May, declined significantly. Concerning the domestic demand, the private consumption might have decelerated in May, as consequence of the decrease observed both in non-durable and durable consumption. The investment indicator also pointed to a deceleration of this variable, due to the reduction recorded in all the components, but mainly in construction. In the same month, on the supply side, the Short Term Indicators information revealed a less dynamic evolution in the services, industry and construction sectors. However, in the last months, the behaviour of these indicators has been partially influenced by calendar effects. In nominal terms, imports (6.4 p.p) and exports (4.8 p.p.) decelerated in May. This behaviour was also partially explained by calendar effects.
In June, year-on-year inflation was 3.4%, 0.6 p.p. more than in the previous month, registering the maximum value of the last two years. The differential between the EA Harmonized Index of Consumer Prices (HICP) and the Portuguese HICP decreased 0.3 p.p. in June, to 0.6 p.p..