Inflation in Italy is falling sharply, bringing a breath of fresh air for families and businesses who had to deal with an unprecedented increase in prices after the outbreak of war in Ukraine. According to Istat data, the increase in prices was lower than expected, marking a reversal of the trend compared to the peak periods recorded in 2022 and 2023.
In December 2024, the consumer price index showed a limited annual increase, with a decline compared to the high rates that had characterized the previous two years. This decline is mainly attributable to the decrease in energy costs, which have eased the pressure on domestic and industrial bills, and to the stabilization of food prices, which had seen dramatic increases due to the global crisis.
Inflation in Italy, which had reached a peak of 12.8% in 2022, began to slow down, reaching 1.3% in December, with an increase of just 0.1% compared to November. In 2024, explains Istat, prices on average in Italy rose by 1%. This is one of the smallest variations in the EU, where the average is 2.4%. The progressive cooling of prices will make the ECB’s path towards cuts in the cost of money easier. The Central Bank wants to continue cutting interest rates ”moderately”. This is what emerges from the minutes of the last meeting relating to the monitoring of rates. “In light of the existing uncertainties, a cautious approach is still warranted. However, if the underlying forecasts for theinflation should they be confirmed in the coming months and quarters, it is considered appropriate to gradually reduce the restrictive monetary policy”, we read in the minutes.
The sectors that have benefited most from this decrease are transport and energy, where the costs of raw materials have stabilized. However, the sectors relating to the food and services sectors still remain under observation, as they continue to record higher than average inflation rates.
THE Consumers, who have had to deal with the high cost of living in recent years, are seeing a gradual improvement in purchasing power. Albeit with caution, we are starting to glimpse a slight recovery in domestic consumption, with greater confidence on the part of Italian families.
The forecasts for 2025, although still uncertain, indicate a possible further decline in inflationthanks also to the monetary policies of the ECB, which have tried to stem inflation through increases in interest rates. However, some experts warn that further efforts may be needed to bring inflation back to optimal levels for the European economy.
In summary, while inflation in Italy is still far from pre-pandemic levels, the downward trend that is being observed offers positive signs for the future. Italian families, while continuing to face economic challenges, can look to 2025 with greater hope, in the knowledge that the improvement in macroeconomic data could translate into greater stability for the country’s economy.
The most expensive city, according to the National Consumers Union, was Bolzano (the most expensive in Europe) with an increase of 1.8% which is equivalent to an increased expense of 492 euros.