In August 2023, Italy’s National Consumer Price Index (NIC), excluding tobacco, is estimated to increase by 0.3% on a monthly basis and 5.4% on an annual basis, down from 5.9% in the previous month (the preliminary estimate was 5.5%).
The deceleration in the inflation rate is mainly attributed to the prices of non-regulated energy products (from +7.0% to +5.7%), recreational, cultural, and personal care services (from +6.6% to +5.8%), unprocessed foods (from +10.4% to +9.2%), transportation-related services (from +2.4% to +1.2%), durable goods (from +5.4% to +4.6%), and to a lesser extent, processed foods (from +10.5% to +10.0%). These effects were partially offset by a moderate increase in housing-related service prices (from +3.6% to +3.9%) and a less significant decline in regulated energy prices (from -30.3% to -29.6%).
The “core inflation,” excluding energy and fresh food, continues to slow down (from +5.2% to +4.8%), as does inflation excluding only energy products (from +5.5% recorded in July to +5.0%).
Annual price growth for goods (from +7.0% to +6.3%) and services (from +4.1% to +3.6%) eases, bringing the inflation differential between the service and goods sectors to -2.7 percentage points, down from -2.9 in July.
Prices for food, household, and personal care products continue to slow down in trend terms (from +10.2% to +9.4%), while high-frequency purchase product prices accelerate (from +5.5% to +6.9%).
The monthly increase in the general index is mainly due to the growth in prices of both non-regulated (+1.7%) and regulated energy products (+1.1%), transportation-related services (+1.2%), processed foods (+0.6%), durable goods (+0.4%), and housing-related services (+0.3%); these effects were partially offset by a decrease in prices for unprocessed foods (-0.5%).
The accumulated inflation for 2023 is +5.7% for the general index and +5.2% for the core component.
The Harmonized Index of Consumer Prices (HICP) increases by 0.2% on a monthly basis and by 5.5% on an annual basis (down from 6.3% in July), confirming the preliminary estimate. The more pronounced decrease in the HICP, compared to the NIC, is due to the dynamics of summer sales (which the NIC does not consider); prices for clothing and footwear record a more significant monthly decline (-3.2%) compared to August 2022 (-0.7%), resulting in a slowdown from +5.4% to +2.7% for this expenditure division.
The national index of consumer prices for blue-collar and white-collar workers (FOI), excluding tobacco, records a 0.3% monthly increase and a 5.2% annual increase.
Note: On September 15, 2023, at 11:32 AM, the historical series file attached to the press release was replaced due to a correction of an error in Table_6 (first sheet). In particular, the NIC index for July 2023 is 119.7, as previously published and consistent with the data released in the I.Stat database.
Commentary:
Inflation in Italy continued to decelerate in August, dropping to 5.4%, along with its core component at 4.8%. The annual slowdown in consumer prices, still significantly influenced by the energy component, also reflects favorable developments in the prices of certain types of services (recreational, cultural, and personal care, as well as transportation) and a deceleration in the year-on-year price growth of food items, although their annual growth rates remain relatively high at 9.7%. Meanwhile, the pace of growth in the prices of the “shopping basket” remains high, although it is decelerating, standing at 9.4% in August.