Inflation above Eurozone average for 8th consecutive month

Italy's consumer price index in May stood at 7.6% year-on-year, while the annual inflation rate in the 20 countries of the eurozone was 6.1%.

Italy: Lam phat cao hon muc trung binh cua Eurozone 8 thang lien tiep hinh anh 1 People shop for goods in a supermarket in Milan, Italy. (Photo: AFP/VNA)

Italy's inflation rate in May 2023 remained higher than the Eurozone average for the eighth consecutive month.

According to data released on June 16 by the Italian National Statistics Agency (ISTAT), Italy's consumer price index in May stood at 7.6% year-on-year, while the annual inflation rate in the 20 countries of the eurozone was 6.1%.

The last time inflation in the Eurozone was higher than in Italy was in September 2022, when the rates were 9.9% and 8.9% respectively. The Italian central bank forecasts Italy's inflation rate for 2023 at 6.1%, while the European Central Bank (ECB) forecasts Eurozone inflation at 5.4%.

Economists have noted that Italy is particularly vulnerable to inflationary pressures due to its reliance on international trade and insufficient domestic energy production to meet demand.

Inflation in Europe rose higher last year due to the economic impact of the conflict between Russia and Ukraine, including Russia's frequent gas supply cuts to Europe. Before the conflict began, Italy was Russia's second-largest natural gas customer in Europe, after Germany.

While global energy prices have begun to fall from record highs late last year, Italy's state-owned energy giant Eni says that retail energy prices in Italy are rising again, according to a survey of petrol and diesel fuel dealers.

This trend has had a negative impact on Italy's trade, thus contributing to price increases.

ISTAT also reported that in April, Italy's exports fell by 1.7% year-on-year, while imports increased by 5.3% year-on-year, reflecting higher prices for raw materials, intermediate goods, and finished products.

The decline in exports was similar for both European trading partners (down 1.5%) and partners outside the European Union (down 2.0%).

ISTAT reported that in the four-month period ending in April 2023, both exports and imports decreased, by 2.2% and 6.5% respectively.

Despite these trends, forecasts for Italy and the European Union (EU) indicate that the rate of inflation in Italy is likely to fall below that of the Eurozone starting next year.

The Italian central bank predicts that inflation will rise to 2.3% in 2024 compared to 2023 levels and continue to fall to 2.0% annually in 2025. During the same period, the ECB forecasts Eurozone inflation at 3.0% in 2024 and 2.2% in 2025.

Duong Hoa (VNA/Vietnam+)

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