Italy still in deflation. Draghi because not enough? – Intelligonews

Italy still in deflation. Draghi because not enough?

According to “preliminary estimates” Istat, consumer prices increased by 0.2% on a monthly basis but were down 0.1% at the annual level, indeed following in the estimates of economists, respectively + 0.3% and -0.1%.

It reduces the tendency towards lower prices of non-regulated energy prices in July from 8% to 7%, and accelerates the growth of unprocessed food prices from 1.5% to 2, 4%. Across the prices of services related to communications recorded a turnaround from 0.4% to -1.4% on a monthly basis, while zero growth than those related to transport services by 0.7% of July. According to this dynamic Istat recognizes the persistence of deflationary phase, but the law as a summary of price dynamics in the opposite direction to compensate.

Highlights: the decline prices of energy goods by 6.5% on an annual basis, although less extensive than 7% in July, goes on to explain the decrease in consumer prices that persists, however, removed this component inflation is positive and equal to 0.6 %. unprocessed excluding food and energy prices, core inflation falls on a monthly basis from 0.6% to 0.4%. The inflation for 2016 is therefore zero from -0.1% in July.

Increase consumer prices (in general) because of increases of (+ 2.2%) related to transportation services prices, unprocessed food (+ 0.9%) and recreation services and personal care (+ 0.4%). The prices of food products, for the care of the house and of the person increased by 0.3% MoM and 0.6% YoY (from 0.4% in July).

All the prices of high-frequency goods and services do not vary in economic terms and record, in terms of trend, a rise from -0.1% in July to 0.1%. According to preliminary estimates, the harmonized index of consumer prices is stable both on a monthly basis and on an annual basis, thus eliminating the 0.2% decline in July.

to do a consideration , the period is the summer holidays, when Italians are more likely to spend, and therefore net of this account since it would not be positive although not numerically negative.

in Europe the situation is no different, the Eurozone inflation stable in August is forecast at 0.2%, compared to July. According to Eurostat estimates, the increase in prices increased on an annual basis is estimated in food, alcohol and tobacco (1.3%, compared to 1.4% in July), followed by services (1.1%, it was one , 2% in July), and the non-energy industrial goods (0.3%; it was 0.4% in July), while the decline continues albeit in energy attenuation (-5.7%, compared to -6, 7% in July).

So the ECB monetary policy, aimed at making higher inflation would continue to benefit not find in the Eurozone, but this is not absolute failure of Mario Dragh , rather it is the consequence of the financial mechanism that would jam participating banks (throughout the eurozone) to finance the company and boost consumption in the sense general. Banks are jammed because they in turn need to cut costs more than possible because the risk reward (zero) rates in financing transactions do not provide sufficient income.