Italian consumer price index rises in December, HICP inflation accelerates slightly y/y

Italian consumer price index rose 0.2 percent on a sequential basis in December, while it rose 0.5 percent on a year-on-year basis, confirming the flash estimate, according to the official statistical office, ISTAT. In the whole of 2019, the average annual rate of inflation came in at 0.6 percent, a slowdown from 1.2 percent in 2018. Meanwhile, core inflation, excluding energy and unprocessed food, came in at 0.5 percent in 2019, a slight deceleration from 2018’s 0.7 percent.

The acceleration of year-on-year inflation was mainly driven by prices of non-regulated energy products, which accelerated to 1.6 percent from -3 percent. The core inflation, excluding energy and unprocessed food, came in at 0.6 percent in December, while inflation excluding energy came in at 0.7 percent.

The sequential growth was mainly driven by rises of prices of services related to transport, unprocessed food, which rose 0.9 percent and 0.6 percent, respectively. Also prices of non-regulated energy products and of services related to recreation also drove the sequential rise. The price of processed food dropped 0.5 percent.

The year-on-year rate of change of prices of goods came in zero from -0.4 percent and that one of prices of services came in at 1 percent. As a consequence, the inflationary gap between services and goods rose 1 percentage points. Prices of grocery and unprocessed food were stable sequentially and rose 0.6 percent year-on-year.

Meanwhile, the Italian harmonized index of consumer prices (HICP) rose 0.2 percent sequentially in December and 0.5 percent year-on-year. In 2019, the HICP inflation slowed to 0.6 percent from 1.2 percent recorded in 2018.

On average, HICP inflation came in lower for households with less purchasing power than for households with greater purchasing power.