Italy Deflation Slows in March

Consumer prices in Italy are expected to decrease by 0.2 percent year-on-year in March of 2016 compared to a 0.3 percent drop in the previous month while beating market expectations of 0.3 percent fall. It was the second straight fall, mainly due to a sharp drop in prices of energy.

Year-on-year, prices of goods fell 1 percent (-0.7 percent in February), as cost of non-regulated energy products dropped sharply by 11.2 percent (from -8.5 percent). In contrast, cost of services went up 0.7 percent (+0.5 percent in the previous month) and services related to transport increased by 0.5 percent (from -0.7 percent).

Meanwhile, core inflation rate (excluding energy and unprocessed food) went up to 0.6 percent from 0.5 percent in the previous month.

On a monthly basis, consumer prices rose by a better-than-expected 0.2 percent, compared with a 0.2 percent drop in the previous month, mainly due to the rise of prices of services related to transport (+1 percent) and of diesel for personal transport equipment (+2.5 percent); these increases were partially balanced by the monthly decline of prices of Fresh vegetables (-2.8 percent).

The harmonized index of consumer prices is expected to decrease by 0.2 percent with respect to March of 2015 and to grow sharply by 2 percent when compared with the previous month.

Italy Deflation Slows in March

Istat | Joana Ferreira |
3/31/2016 11:05:21 AM