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Italy Inflation Surges On Energy Cost

Italy’s inflation rose to its highest level since early 1990s in March on surging energy cost, preliminary data from the statistical office Istat showed on Thursday.

Consumer price inflation rose more-than-expected to 6.7 percent in March from 5.7 percent in February. Inflation was seen at 6.4 percent.

EU harmonized inflation advanced to 7.0 percent from 6.2 percent a month ago. However, this was slower than the economists’ forecast of 7.2 percent.

Data showed that energy prices climbed 52.9 percent annually. Prices of processed food gained 4.0 percent and that of unprocessed food moved up 8 percent.

Core inflation that excludes energy and unprocessed food, advanced to 2.0 percent from 1.7 percent in the previous month.

Further pass-through of energy costs is on the cards, but its scope might be slowed by a consumption-driven GDP contraction in the first quarter, Paolo Pizzoli, an ING economist, said.

The economist expects a stabilization of inflation around the current level over the first half of 2022, and a decline thereafter, with average 2022 inflation at 5.8 percent.

On a monthly basis, consumer price inflation came in at 1.2 percent, faster than the 0.9 percent economists’ had expected. Similarly, the harmonized index of consumer prices climbed 2.6 percent versus the expected rate of 2.8 percent.

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