Italy: Inflation edges up in June
July 24, 2012
In June, consumer prices rose 0.2% over the previous month, which was above the flat reading recorded in May and confirmed the preliminary estimate released by ISTAT on 28 June. Higher prices for food and non-alcoholic beverages as well as for communications were the main drivers of the monthly increase. As a result of the monthly reading, annual inflation inched up from 3.2% in May to 3.3% in June. The core inflation index, which excludes more volatile categories such as unprocessed food and energy, rose 0.3% over the previous month, contrasting the 0.1% drop recorded in May. Despite the monthly pick-up, annual core inflation was unchanged at May's 2.2%. Nevertheless, annual average HICP inflation inched up from 3.3% in May to 3.4%. In its July Bulletin, the Bank of Italy updated its forecasts and currently sees HICP inflation averaging 3.0% this year, slightly down from the previously expected 3.1%, before dropping to 1.8% next year (previously expected: +2.4%).
Author: Armando Ciccarelli, Head of Data Solutions