Italy Slides Back Into Deflation


Italy's consumer prices are expected to fall by 0.1 percent year-on-year in October 2016 after growing by 0.1 percent in September and missing market consensus of 0.1 percent gain, preliminary estimates showed. Lower prices for energy products and unprocessed food dragged down inflation, while cost of services related to recreation, including repair and personal care showed no growth.

The decline was led by a fall in energy products (-3.6 percent from -3.4 percent in September), as a larger decline of prices of regulated energy (-6 percent from -3.8 percent) was partly offset by lower decline of non-regulated energy products (-0.8 percent from -2.7 percent). Additional downward pressure came from unprocessed food (-0.4 percent from +0.4 percent in September) while cost of services related to recreation, including repair and personal care showed no growth (from +0.6 percent).

Annual core inflation rate, which excludes energy and unprocessed food, fell to a record low of 0.2 percent compared to 0.5 percent the previous month.

On a monthly basis, consumer prices were flat, following a 0.2 percent drop in September and below market expectations of 0.2 percent gain. Higher prices of non-regulated energy products (+1.1 percent) were offset by decreases of those of services related to transport (-1.2 percent) and services related to recreation, including repair and personal care (-0.4 percent).

The harmonized index is expected to fall by 0.1 percent on the year and rose by 0.2 from the previous month. 

Italy Slides Back Into Deflation


Istat | Joana Ferreira | joana.ferreira@tradingeconomics.com
10/31/2016 10:34:35 AM