Istat, Italian inflation slows in December: estimate at 0.6% per year

The Institute’s preliminary estimates: on average, consumer prices will grow by 5.7% in 2023

Continue the sharp slowdown in inflation in Italy in December, according to preliminary Istat estimatessees a national consumer price index for the entire community, including tobacco, increasing by 0.2% on a monthly basis and by 0.6% on an annual basis (from +0.7% in the previous month).

On average, in 2023 consumer prices recorded a growth of 5.7% (+8.1% in 2022). Net of energy and fresh food (the “underlying inflation”), consumer prices grew by 5.1% (+3.8% in the previous year) and net of energy alone by 5.3% (+4.1% in 2022).

In December, “underlying inflation” decelerated from +3.6% to +3.1% and that net of energy goods alone from +3.6% to +3.4%.

The slowdown in inflation on a trend basis – continues Istat – is mainly due to the prices of regulated energy goods (which accentuate their decline from -34.9% to -41.7%), to those of recreational, cultural services and for personal care (from +4.6% to +3.6%) and processed food goods (from +5.8% to +5.0%); on the other hand, support for the inflation dynamics comes from the easing of the decline in the prices of unregulated energy (from -22.5% to -21.1%) and from the acceleration of those of unprocessed food goods (from + 5.6% to +7.0%).

however, on a monthly basis the increase in the general index is mostly due to the growth in prices of transport-related services (+1.4% also due to seasonal factors), of unprocessed food goods (+0, 7%) and durable and non-durable goods (both +0.5%); the effects of these increases were only partially offset by the decrease in energy prices, both regulated (-3.5%) and unregulated (-2.1%). Based on preliminary estimates, the harmonized index of prices at consumption (HICP) increases by 0.2% on a monthly basis and by 0.5% on an annual basis (from +0.6% in November). In 2023 the average annual change in the HICP is +5.9% (+8.7% in 2022).

Inflation fell from 11.6 to 0.6% in one year

If in December, according to preliminary estimates from Istat, the declining phase of inflation continues, falling to 0.6% from 11.6% in December 2022, the contribution of energy prices is strong. The institute reports this, recalling the easing of tensions on the prices of energy goods which have risen to +1.2% from +50.9% in 2022. However, prices in the food sector are going against the trend, showing an acceleration in average annual growth ( +9.8%, from +8.8% in 2022), despite the attenuation of their trend dynamics, highlighted in the second half of the year. Based on preliminary estimates, concludes Istat, the drag on inflation to 2024 is equal to +0.1%.

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In December, according to preliminary estimates from Istat, the prices of food, household and personal care goods slowed down slightly on a trend basis from +5.4% to +5.3%, as did those of high-frequency products. purchase (from +4.6% in November to +4.4%).