Italy: Inflation inches down in November
December 15, 2011
In November, consumer prices dropped 0.1% over the previous month, which contrasted the 0.6% increase recorded in October and was also down from the flat reading recorded in the same month last year. The result was influenced by the high comparison base from October, which was the result of the increase in value-added tax (VAT) to 21%, effective from 17 September. Accordingly, annual inflation eased from 3.4% in October to 3.3% in November, in line with market expectations. The core inflation index, which excludes more volatile categories such as unprocessed food and energy, contracted 0.2% over the previous month. As a result of the monthly drop, annual core inflation inched down from 2.5% in October to 2.4% in November. Finally, annual average HICP inflation edged up from 2.6% in October to 2.8% in November. The Bank of Italy sees HICP inflation averaging 2.7% this year, before dropping to 1.9% next year.
Author: Armando Ciccarelli, Head of Data Solutions