We are heading towards winter with a recovery in inflation, albeit moderate, a rise in the prices of essential goods and a contraction in exports. According to data released by Istat, inflation rose again in October (+0.9%) and shopping cart prices accelerated. For exports there was an increase on a monthly basis (September +1.3%) but on an annual basis there was a decline, caused above all by the contraction in the sale of motor vehicles.
In October, inflation in Italy recorded an increase on an annual basis of 0.9%, compared to +0.7% in the previous month. Data that defines a picture of stability on a monthly basis, but shows signs of inflationary recovery in key sectors, such as the food sector. Particularly significant was the increase in the prices of the shopping cart, which includes food, home and personal care goods. On an annual basis, these marked an acceleration of +2%, compared to the +1% recorded in September. A similar trend is also observed in high-frequency purchase products, whose growth rate went from +0.5% to +1.0%. Among the factors that pushed inflation, the increase in prices of unprocessed food stands out, which jumped to +3.4% on an annual basis (against +0.3% in September). Processed products also showed a slight growth (+1.7% compared to the previous +1.5%). Despite these increases, energy goods continue to show negative inflation, with a decline of -10.2% for unregulated ones, attenuated compared to last month (-11%). “Among the most surprising data, costs related to education rise by +5.9%, a record never recorded in the data available since 2016. Even the Italians’ table is under pressure: tomatoes mark a record increase of +18, 2% on a monthly basis, due to reduced availability due to adverse weather conditions. Even the classic pasta with tomato sauce therefore risks becoming a luxury. Inflation in Italy remains low compared to Europe, but the increases in essential goods show signs of tension that we cannot ignore. The risk is that families’ purchasing power will slip away, especially with winter upon us. The slowdown in the economy doesn’t help,” comments Gabriel Debach, Italian market analyst at eToro
On the foreign trade front, September 2024 recorded a cyclical growth in exports (+1.3%) and imports (+1.2%), driven mainly by sales to European Union countries (+2.4% ). However, on an annual basis, exports suffered a contraction of -2.2%, the synthesis of a decline of -5.3% in terms of volume. The reduction in exports is mainly attributable to the decline in sales of motor vehicles (-29.2%) and refining products (-42.6%). In particular, the United States and German markets recorded the largest declines, of -13.4% and -4.6% respectively. On the contrary, exports to Switzerland (+18.4%), Turkey (+18.0%) and OPEC countries (+10.3%) contributed to mitigating the overall decline. The pharmaceutical (+15.2%) and food (+7.8%) sectors continue to provide important support to Italian exports, confirming the resilience of strategic sectors in a context of global economic slowdown.
Despite the annual decline, the Italian trade balance in September was positive, equal to 2,580 million euros, an improvement compared to the 2,132 million in the same month of 2023. The energy deficit was reduced to -3,898 million, a sign of a partial easing of pressure on energy import costs.
