Inflationary autumn in Italy: the most expensive shopping basket in decades

According to Istat (Italian National Institute of Statistics) the level of inflation last October had not been reached in the transalpine country for almost four decades. In data from Eurostat, a European meter, the rise in prices has been 12.8%, a little lower according to Italian calculations -which speak of 11.8%- but the highest, without a doubt, for a long time. The accumulating increase in energy costs, since before the war, has marked the great rise in expenses for families and companies for which the Government has already stalled four “aid decrees” that reach more than 27 billion euros and that continue to increase – the last one approved by the new prime minister Giorgia Meloni – to alleviate the weight of the uncontrolled prices of the gas and electricity bills. In fact, the energy increase in the month of October reached 73.2% more than a year ago. But it’s not just this spending that throws the economy of Italian families out of control, inflation has also been seen for months in the shopping basket, but what until now had been small rises, now, at the end of the year, they accumulate in more considerable percentages. That is why, in view of the new budgets, on which the Italian Executive is already working against the clock, the possibility of reduce VAT on bread and other basic products such as pasta or milk.

Particularly in the shopping cart, according to ISTAT data, to find prices that rise with respect to the previous month as they have currently, we have to go back to June 1983. Prices have increased in the supermarket from 10.9% in September to 12.7% in October, two points more than in September. In general, the annual rise data, compared to 2021, is 11.9%. In addition, consumer associations claim that these calculated data are even greater in the gap perceived by the average citizen who, since last March when inflation already exceeded 6%, find impossible prices when making the purchase. In addition, the so-called permanent inflation, which is eradicated in the economy and which excludes energy and food products, has gone from 5 to 5.53%.

Some of the most expensive products, according to Unionecamere (the Chamber of Commerce of Rome), are, for example, the Butter which has increased from 122% compared to a year ago, flour 46% and milk 64%. This is the case with other fresh products which, according to data from Coldiretti (the main Italian agricultural association), have risen in one year to 25.1% for vegetables and 6.5% for fruit. In the month of November, the increase compared to 2021 was 15.3% in eggs, 7.2% in oil or 15.8% for chicken. Increases that are added to the previous ones in a year of continuous inflationary trend.

This rise is undoubtedly due to a general increase in energy prices, the tip of the iceberg, which affects the final production and transport chain of the products we see in the supermarket. Thus energy and food inflation are closely related. Producing food costs more than double and the gasoline to transport it has suffered historic increases in recent months. Two contextual aspects that are behind a shopping basket that, for a family unit of four people, it is estimated can mean more than 650 euros per year for adults. In addition to another fundamental factor: in Italy food imports have risen from 5 billion in the 1980s to 40 billion today. Products that, being imported, are more sensitive to fluctuations in market prices.

As Leonzio Rizzo, professor of Finance Sciences at the University of Ferrara, explains, while everything depends on the issue of war, and, as a consequence of energy inflation, there is great uncertainty. “Now inflation is diffuse, it started with the increase in the price of gas, but it has spread to all other goods, which makes it more difficult for it to be reversed easily. Even if the energy market were to balance, it would take time for the rest of the market to balance”, Explain. Regarding possible measures such as the reduction of VAT on some foods, the expert points out that they can be used in the short term to help the most affected citizens, but it does not solve the problem of the infalción that assumes the State, that can be found with a problem of public financing.