Portugal is temporarily abolishing value-added tax (VAT) on basic food products to reduce prices.

Portugal's left-wing government plans to abolish VAT on 44 basic food products in the next six months, the prime minister said. Antonio Costa. The VAT on those foods is now six percent.

He added that the measure is part of the agreement signed with producers and traders in order to stabilize prices. Košta emphasized that the agreement foresees planned and financial support for farmers and herders, in the amount of 600 million euros.

The abolition of VAT for bread, pasta, rice, milk, eggs, yogurt, cheese, oil, butter, meat and fish can be extended after the initial six-month period, Kosta pointed out.

The draft law has not yet been adopted by the Parliament.

Annual consumer inflation in Portugal reached 8,2 percent in February, slightly below the 8,5 percent recorded in the eurozone, of which Portugal is a member. But food inflation recently topped 20,1 percent.