Italy’s consumer prices rise y/y, but decline on month-on-month

Italy’s consumer price index rose in July, compared to a year earlier period, but fell on a month-on-month basis, according to final data released Thursday.

Italy's consumer price index (CPI) fell by 0.1 percent in July on an annual basis but rose 0.2 percent compared to the previous month, data released by statistics agency Istat showed Thursday.

The annual rate declined for the sixth consecutive month, mostly due to the fall in energy prices and Istat said core inflation, which excludes fresh food and energy prices, rose 0.6 percent on an annual basis and 0.2 percent from the previous month.

The Italian harmonized index of consumer prices (HICP) decreased by 1.9 percent from June and by 0.2 percent compared to July 2015. Low or negative inflation is seen as a threat to recovery prospects.

The Italian economy, which returned to positive growth in 2015 after years of recession, also endured periods of deflation both in 2015 and in 2014. Further, the agency said 16 major cities were enduring price deflation, including Milan, with prices down 0.6 percent, and Rome, down 0.2 percent.

Meanwhile, Istat said its annual trolley index for the prices of the most frequently bought everyday goods, such as food and household items, was 0.4 percent up in July, compared to 0.2 percent in June.