Italy’s consumer prices this month dropped the most since records began after the euro-area’s third-largest economy slipped into recession, adding to concerns that the region might be headed toward deflation.
The inflation rate based on European Union measurements fell 0.2 percent in August from a year earlier, Rome-based national statistics office Istat said in a preliminary report today. That’s more than the median forecast of a 0.1 percent decline in a Bloomberg News survey of 12 economists.
Prices also fell 0.2 percent from July. Italy’s economy contracted for a second quarter in the three months through June sliding into its third recession since 2008, Istat said in a separate report today. Data also showed unemployment at a record high in the second quarter.
The slump comes as Prime Minister Matteo Renzi is under pressure to deliver on his program of reforms and European Central Bank President Mario Draghi has hinted he could add more stimulus to foster economic growth and prevent deflation.
“In previous years Italians refrained from purchasing non-essential goods, including clothes and shoes, while more recently began to cut on food,” the country’s Coldiretti farmers’ union said in a note commenting today’s consumer price data.
The “falling prices of fresh food show the effects of the recessive spiral of deflation and consumption.”
Record Low
Today’s reading of the EU-harmonized consumer price rate was at the lowest level since records began almost ten years ago. Based on Italian methodology, prices fell 0.1 percent from a year earlier, the first reading below zero since 1959, Istat said.
The fall in consumer prices was mostly due to an increased year-on-year decline of energy costs and to a slowdown in the price of services, Istat said. The euro area’s inflation rate rose 0.3 percent in August from a year earlier after a 0.4 percent increase in July, the European Union’s statistics office in Luxembourg said today in preliminary estimates.
That’s the weakest rate since October 2009. Draghi indicated last week that he may boost stimulus amid concerns about falling inflation expectations which could impact actual inflation as investors, consumers and companies pull back spending in anticipation of even weaker prices.
That could tip Europe into a deflationary spiral that would be hard to reverse. The ECB Governing Council will convene for its next rate-setting meeting on Sept. 4.
bloomberg.com
The inflation rate based on European Union measurements fell 0.2 percent in August from a year earlier, Rome-based national statistics office Istat said in a preliminary report today. That’s more than the median forecast of a 0.1 percent decline in a Bloomberg News survey of 12 economists.
Prices also fell 0.2 percent from July. Italy’s economy contracted for a second quarter in the three months through June sliding into its third recession since 2008, Istat said in a separate report today. Data also showed unemployment at a record high in the second quarter.
The slump comes as Prime Minister Matteo Renzi is under pressure to deliver on his program of reforms and European Central Bank President Mario Draghi has hinted he could add more stimulus to foster economic growth and prevent deflation.
“In previous years Italians refrained from purchasing non-essential goods, including clothes and shoes, while more recently began to cut on food,” the country’s Coldiretti farmers’ union said in a note commenting today’s consumer price data.
The “falling prices of fresh food show the effects of the recessive spiral of deflation and consumption.”
Record Low
Today’s reading of the EU-harmonized consumer price rate was at the lowest level since records began almost ten years ago. Based on Italian methodology, prices fell 0.1 percent from a year earlier, the first reading below zero since 1959, Istat said.
The fall in consumer prices was mostly due to an increased year-on-year decline of energy costs and to a slowdown in the price of services, Istat said. The euro area’s inflation rate rose 0.3 percent in August from a year earlier after a 0.4 percent increase in July, the European Union’s statistics office in Luxembourg said today in preliminary estimates.
That’s the weakest rate since October 2009. Draghi indicated last week that he may boost stimulus amid concerns about falling inflation expectations which could impact actual inflation as investors, consumers and companies pull back spending in anticipation of even weaker prices.
That could tip Europe into a deflationary spiral that would be hard to reverse. The ECB Governing Council will convene for its next rate-setting meeting on Sept. 4.
bloomberg.com
No comments:
Post a Comment