Inflation in Italy accumulated in 2022 the highest level since 1985

The data was published by the Italian National Statistical Institute / Photo: Street View.

The Consumer Price Index (CPI) in Italy It continued to moderate in December, reaching 11.6% annually, two tenths less than the previous month, and closed the year accumulating 8.1%, more than quadrupling the 1.9% of 2021 and a record since 1985, when it marked 9 ,2%.

According to preliminary data published by the National Institute of Statistics (Istat), prices increased 11.6% annually and 0.3% monthly in the last month of the year.

Meanwhile, throughout 2022 inflation was 8.1%, with a strong incidence of energy and food components.

Energy, in particular and after the strong rise triggered by the war between Russia and Ukraine, had a great impact, accumulating an average increase of 50.9% in the year compared to 0.8% in 2021.

Stripping out energy and food, core inflation was just 3.8%, although it was still a strong rebound from 0.8% in 2021.

On the other hand, the moderation in December is mainly explained by the decrease in energy goods, which went from 67.6% annually in November to 64.7% in December, particularly non-regulated electricity (from 69.9% to 63.3%).

there was also a decline in unprocessed food goods (from 11.4% to 9.5%) and transport-related services (6.8% to 6%).

In contrast, regulated energy goods increased (57.9% to 70.3%), processed foods (14.3% to 14.9%), recreational, cultural and health services (5.5% to 6.2% ); and communications (0.2% to 0.76%).

In December processed foods increased from 143 to 149
In December processed foods increased from 14.3% to 14.9%.

The core inflation in december it also had a slight rise, going from 5.6% annually in November to 5.8%, according to the report published by Istat.

“Based on preliminary estimates, drag inflation for 2023 – that is, the average increase that would occur if prices remain stable until next December – will be 5.1%, a broader base than that observed for the previous year. 2022, which was 1.8%”, adds the report.

All these figures are higher if the harmonized standards of the European Union are taken into account: inflation in December would be, following said methodology, 12.3% per year and 8.7% throughout 2022.

Italian government measures

Faced with rising prices, the ultra-right government of Giorgia Meloni promised, within the budget for this year, to contribute more than US$ 22,000 million for support measures to alleviate the cost of energy in homes and businesses.

However, the prime minister decided at the beginning of 2023 to abolish the 30-cent discount on tax per liter of gasoline approved by his predecessor Mario Draghi last year, according to the AFP news agency.

As for the gas pricesthey increased by 64.8% in 2022, equivalent to an increase of US$ 1,979 per home, according to the National Energy Authority.

Italy thus joins Germany, France and Spain among the European countries that have reported falls in their inflation rates for December, compared to the trend of previous months.

The restraint could represent a signal for the European Central Bank (ECB) moderates its policy of increasing interest rateswhich revised them upward four times in 2022, accumulating a rise of 250 basis points since July.

The increase in rates can not only push the European economy into recession but is also a problem in heavily indebted countries like Italy itself, where debt represents 145% of Gross Domestic Product (GDP).

The inflation rate in the Eurozone was 10.1% annual in Novemberand it is expected that by December this figure will once again be in single digits.

Inflation in Italy accumulated in 2022 the highest level since 1985