Italy ended 2022 with record-high inflation rate

Prices in Italy rose to record levels in 2022, the government’s statistics entity ISTAT said.

For the year as a whole, prices were an average of 8.1 per cent higher than a year earlier, the highest level in Italy since the introduction of the euro currency in 1999, reports Xinhua news agency.

In 2021, the year-on-year increase was just 1.9 per cent.

The increase in prices was even more dramatic at the end of the year: in December, prices were 11.6 per cent higher than in December 2021, and in the two previous months the year-on-year increase was 11.8 per cent.

ISTAT said the main factor driving up prices was higher energy costs stemming from the ongoing Russia-Ukraine war.

Although rising energy costs have had an impact across the European Union and beyond, the problem is especially acute in Italy.

Before the start of the Ukraine war, the country was highly dependent on imports of Russian natural gas.

The Italian economy is also the European Union’s second-largest exporter, but this has been greatly impacted by higher production and transport costs.

The inflation rate for the euro currency zone in December was 9.2 per cent, according to preliminary figures from Eurostat, down from 10.1 per cent in November.

Leading Italian business association Confesercenti said rising prices are hitting the poorest people ardest, with a larger percentage of their income used up by the cost of energy and other inflation-sensitive products.

The estimated inflation rate for poor families in the country is 16 per cent.

“The picture for 2023 remains uncertain, with a change in the inflation rate that will remain above 5 per cent,” Confesercenti said on Tuesday, estimating that even if energy prices stabilize they will be as much as 150 per cent higher this year than they were in 2009.

Confesercenti called for sustained government support for poor families, and companies operating in energy-intense economic sectors.

According to ISTAT’s data, energy prices were 63.3 per cent higher at the end of 2022 than they were a year earlier, by far the largest increase in the basket of goods monitored to calculate the inflation rate.

Transport prices were also up by 6.0 per cent, unprocessed foods by 9.5 per cent, and processed foods by 14.9 per cent.

On average, energy prices were 50.9 per cent higher in 2022 as a whole than they were in 2021.

The last time prices rose so much in one year in Italy was in 1985, when the country still used the lira currency and the average annual inflation rate was 9.2 per cent.

20230118-152805

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