Italy CPI rises again in April amid energy prices volatility
2023.05.02 12:17
© Reuters. FILE PHOTO: A woman with a protective mask checks vegetable prices at Madama Cristina market, which is virtually deserted after the Italian government imposed a virtual lockdown on a wide swathe of northern Italy, in Turin, Italy March 9, 2020. REUTERS/Ma
By Antonella Cinelli
ROME (Reuters) – Italian inflation jumped unexpectedly in April, driven by another spike in energy prices, official statistics agency ISTAT said on Tuesday.
EU-harmonised consumer prices (HICP) rose a preliminary 1.0% month-on-month, with annual inflation accelerating to 8.8% from 8.1% in March, well above the median forecast of a 7.8% year-on-year rise.
Italy’s inflation dynamic continues to be affected by an ongoing adjustment in energy prices, its most volatile component, wrote Loredana Maria Federico, chief Italian economist at UniCredit.
ISTAT underlined that the annual rise was mainly due to non-regulated energy products such as fuel for domestic use, electricity in the liberalised market and vehicle fuels. In the main domestic price index these elements jumped 26.7% in April from a 18.9% increase the month before.
On the contrary, regulated energy products showed a wider decline than in March (-26.4% from -20.3%).
CORE INFLATION IN FOCUS
“Given how low gas prices are on the wholesale market, we expect this to be only a temporary pause in the downward adjustment in inflation,” said UniCredit’s Federico, adding that “the dynamics of both food-price and core inflation moved broadly in line with expectations”.
Italian core inflation (net of fresh food and energy) was stable at 6.8% year-on-year on the HICP index in April.
In the euro zone, overall price growth picked up to 7.0% last month from 6.9% in March, but the underlying inflation growth unexpectedly eased to 7.3% from 7.5%, based on Eurostat data.
A surprise growth in core inflation has been in focus in recent months, suggesting that the ECB could have more work to do to contain mounting price pressures.
In Italy the path towards a further slowdown in inflation remains solid, with producer prices also progressively showing a slowing signal, ING senior economist Paolo Pizzoli wrote.
“But the data show that the process is likely to be slow and should only accelerate in the second half of the year,” he added.
