Italy Posts Deflation for Second Straight Month

The Italian consumer prices decreased 0.1 percent year-on-year in February, lower than a 0.2 percent drop initially estimated and following a 0.6 percent fall in January. Yet, core inflation increased at a faster 0.6 percent.

Year-on-year, transport prices fell 3.1 percent; cost of housing, water, electricity and gas decreased 1.4 percent; communication prices dropped 1 percent and and recreation and culture cost edged down 0.2 percent.

In contrast, food prices increased 1 percent as cost of fresh vegetables increased 10.8 percent, rebounding from a 1.7 percent fall in the previous month. Cost of services related to transport increased at a faster 1.4 percent (0.3 percent in January); tobacco prices surged 3.7 percent (-0.4 percent) and cost of non-regulated energy products fell at a slower 12.8 percent (14 percent in January).

Excluding energy and unprocessed food, core inflation was 0.6 percent (up from +0.3 percent in the previous month); excluding energy, the inflation was 0.7 percent (0.4 higher than in January 2015).

On a monthly basis, consumer prices rose 0.4 percent, up from a preliminary 0.3 percent increase and following a 0.4 percent fall in January. The rise was mainly driven by higher prices of fresh vegetables (7.8 percent), tobacco (4.1 percent) and services related to transport (0.8 percent).

The EU harmonised index rose 0.3 percent month-on-month and 0.1 percent year-on-year, matching preliminary estimates.

Italy Posts Deflation for Second Straight Month

Istat | Joana Taborda |
3/13/2015 9:49:12 AM