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Italy CPI rises again in April amid energy prices volatility
Global Banking & Finance Review®
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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.
(Reporting by Antonella Cinelli, Valentina Consiglio, editing by Keith Weir)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
Core inflation excludes certain items that face volatile price movement, specifically food and energy prices, to provide a clearer view of the underlying inflation trend.
Energy prices refer to the costs associated with energy sources such as oil, gas, and electricity. These prices can significantly impact overall inflation rates.
The euro zone is a group of European Union countries that have adopted the euro as their official currency, facilitating easier trade and economic stability among member states.
The Consumer Price Index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services, serving as an indicator of inflation.
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