Portuguese consumer prices rose 3.6% year-on-year in September, slowing down from a 3.7% increase in the previous month, flash data from the National Statistics Institute (INE) showed on Friday.

Core inflation, which strips out volatile food and energy prices and is seen as a better gauge of the underlying trend, was at 4.1% year-on-year, down from a reading of 4.5% in August.

After peaking at 10.1% year-on-year in October 2022, inflation in Portugal has been slowly coming down, but this trend was interrupted in August, when consumer prices were boosted by higher fuel prices.

On a monthly basis, consumer prices rose 1.1%.

The INE said energy prices slumped 4.1% from a year ago, following an 6.5% drop in the previous month, while prices of unprocessed food products rose 6.0%, slightly less than August's 6.4% and way below a peak of over 20% earlier this year.

The government has recently extended the exemption on more than 40 basic food staples from value-added tax until the end of the year.

(Reporting by Patrícia Vicente Rua and Gdansk Newsroom; Editing by Andrei Khalip)