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Italian Inflation Remains Stable

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Italian Inflation Remains Stable

The Italian Istituto Nazionale di Statistica has shed some further light on the inflation situation within Europe this morning. Last week’s readings from several Eurozone countries produced some concern that the European Central Bank (ECB) is losing the fight to maintain steady and sustainable upward price momentum.

The March month over month Consumer Price Index (CPI) for Italy has just come in at 0.1%. This is slightly higher than the previous month of -0.1% and exactly hit the consensus expectations of 0.1%. The year over year CPI was 0.4%, again meeting the expectations of 0.4% but dropping from the February figure of 0.5%.

Each Eurozone country maintains it’s own methods for CPI calculations but simultaneously publishes a second ‘harmonized’ figure that recalculates consumer price inflation using an EU standardized method. This ultimately enables the ECB to work with an overall harmonized Eurozone inflation rate. Italy’s CPI (EU-Norm) figure month on month has come in stable at 2.2% against the February reading moderately beating a March estimate of 2.1%. The year over year version of this data is 0.4% against 0.5% last month but did meet the market anticipated number of 0.4%.

Italian inflation numbers are possibly not the best guide to overall EU price stability. Although the Italian numbers feed in proportionally to the Harmonized EU inflation number and influence it accordingly, they have in recent years tended not to be as correlated to this overall number as the likes of France and Germany would be.

Price growth in Italy has in fact been considerably stronger than most of it’s European peers during much of this economic crises, only over the last two quarters has it fallen back to EU-18 mean levels. This mornings figures, although somewhat mixed are showing at least some basic stability in Italian prices, this stability appears all the more valid when taken in the context of last weeks falling overall EU numbers.

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