Italy Inflation March 2022


Italy: Inflation comes in at highest level since July 1991 in March

April 15, 2022

Consumer prices increased 1.00% in March over the previous month, picking up from February's 0.92% increase according to a second release by the statistical authority. Looking at the details of the release, the higher print was largely due to an increase in price pressures for non-regulated energy products. This comes amid soaring global energy prices, which increased at a faster rate in March than they had in the prior month.

Inflation came in at 6.7% in March, up from February’s 5.7%. March's reading was the highest inflation rate since July 1991. Annual average inflation rose to 3.2% in March (February: 2.7%). Finally, harmonized inflation rose to 6.8% in March, from the previous month's 6.2%.

Paolo Pizzoli, senior economist for Italy and Greece at ING, commented:

“Measures taken by the Italian government to help households and businesses weathering the energy price storm (worth a cumulated €18bn since Q4 2021) have so far only managed to limit the scope for price increases. The last relevant decree, approved on 22 March, included a temporary (30 days) substantial cut of excises levied on petrol and diesel fuel, which might not yet be reflected in the March release but will be in April […] All in all, we are tentatively projecting a stabilisation of inflation around the current level over H1 2022, and a decline thereafter, with average 2022 inflation at 5.8%.”

UniCredit’s chief Italy economist Dr. Loredana Maria Federico also commented on the reading:

“Electricity and gas prices have also increased further, especially gas in non-regulated markets. Despite the spikes due to the Russia-Ukraine crisis, the evolution of the market prices of natural gas in the first quarter proved to be more benign than initially feared. This will positively affect the price of electricity and gas bills for Q2 2022, for which the Italian Authority for Energy has just announced a 10% qoq decline, also thanks to the relief provided by government support measures. This is good news as it represents a pause in the increase in prices for gas and electricity observed since Q3 2021 that has strongly contributed to the rise in inflation so far.”

FocusEconomics panelists see harmonized inflation averaging 5.7% in 2022, which is up 1.6 percentage points from the previous month’s estimate, and 1.8% in 2023.


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