Istat: electricity and gas for domestic use are driving inflation

Energy prices are increasingly driving Italy’s inflation curve. Today, Istat released the final figures for July: the national consumer price index rose by 0.3 per cent compared with June and by 2.9 per cent year-on-year, compared with the 2.8 per cent in the preliminary estimate. This means that the National Institute of Statistics has revised the July figure upwards – albeit only slightly – which, incidentally, is fairly in line with what is happening in Germany. Energy also plays a central role in that country. What sets Italy’s inflation trend apart is the slowdown in everyday consumer goods (the shopping basket, particularly food and personal care products), whilst energy prices are rising. Within this broad category, however, distinctions need to be made.

Whilst there has been a decline in unregulated energy goods – whose prices are determined by the free market (falling from 13.3 per cent in June to 11.4 per cent in July) – regulated energy goods – whose tariffs are set by government agencies – have seen a sharp rise: from 9.2 per cent in June to 14. 8 per cent in July, representing a 6.5 per cent rise in a single month. Put simply, we are talking about electricity and gas for domestic use: these are the commodities having the greatest impact on Italian inflation. A breakdown of the Istat data paints a clear picture. According to Codacons, in fact, a 2.9 per cent rise in inflation in July (year-on-year) translates into an extra €959 (over the year) in expenditure for a typical family with two children. However, the consumer association warns that in the coming months, price rises for unregulated energy products (petrol and diesel) – which currently appear to be slowing down – will also be felt. Meanwhile, the hit will soon be felt on gas and electricity bills, fuelled by the intense heatwave that has forced Italians to keep their air conditioners running.