Italy Inflation Rate Below Forecasts

Italy’s annual inflation rate came in at 0.4 percent in September of 2019, the same as in the previous month while markets were expecting an increase to 0.6 percent, preliminary estimates showed. It remains at its lowest level since November 2016 as higher prices of processed food including alcohol and recreation services including repair and personal care were offset by lower cost of unprocessed food and transport services.
Istat | Agna Gabriel | 9/30/2019 12:11:12 PM
Year-on-year, inflation should be steady for both clothing & footwear (at 0.3 percent) and furniture & household equipment (at 0.1 percent). At the same time, food & non-alcoholic beverages prices edged up to 1 percent from 0.9 percent in August, as processed food including alcohol rose faster (0.7 percent from 0.2 percent) while unprocessed food cost slowed (1.1 percent from 1.5 percent); and recreation & culture edged up 0.1 percent, after showing no growth, as services related to recreation, including repair and personal care advanced 1.3 percent (from 1 percent). Meanwhile, prices are expected to rose further for restaurant & hotels (1.3 percent from 1 percent); miscellaneous goods & services (1.8 percent from 1.5 percent) and alcoholic beverages & tobacco (2 percent from 1.9 percent). 

On the other hand, cost of transport is likely to fall (-0.7 percent from 0.6 percent), with services relating to transport increasing 0.4 percent, slowing from a 1.7 percent rise in the prior month. Both, housing & utilities (-0.3 percent, the same as in August) and communication (-7.2 percent from -8 percent) are expected to continue to drop in September.

Annual core inflation rate, which excludes energy and unprocessed food, should edge up to 0.6 percent in September from 0.5 percent in the previous month. Excluding only energy, inflation should be steady at 0.6 percent, the same as in August. 

On a monthly basis, consumer prices are likely to decrease 0.5 percent, down from a 0.4 percent gain in the prior month and compared with market expectations of a 0.2 percent drop.

The harmonized index of consumer prices is expected to rise 0.3 percent from the previous year (from 0.5 percent in August); and to advance 1.5 percent month-over-month (from a flat reading in August).

Italy Inflation Rate Below Forecasts