Returns the deflation on Italy: prices-October-0.2% – The Republic

the MILAN - Italy puts his head under the water: back deflation, according to data provided by Istat, the definitive and the relative in October. In the last month the inflation was, in fact, a drop of 0.1% on a monthly basis and 0.2% on an annual basis, “showing again the trends deflationary after the shooting of September, when the trend was positive at 0.1%. The preliminary estimate was-0.1%.

The Institute details that the annual decrease of the index continues to be explained with the voice of “energy Goods”, whose contraction worsens (-3,6% -3,4% in September) “the effect of a more intense decline in prices of those that are regulated (-6,0%, was 3.8% at September) and a partial return of the contraction of the energy Goods non-regulated (by 0.9%, from 2.7% of the previous month)”. The situation of deflation, which so frightens economists as an indicator of a slowdown in economic growth in general, contribute to “other types of products, among which stand out the Food is not processed (down 0.4%, from +0.4% in September), and the recreational, cultural, and care of the person; the growth of which is clear from the +0.6% in September”.

The decline in prices is played by the Ecb itself, which has the mandate to keep them close to +2% in the medium term. With deflation, in fact, economists see the risk of a negative spiral which you refer purchases in view of more discounts, with depressing effects for the whole economy, for the balance sheets of the companies sellers and the growth of Gdp. In addition, without rise in prices, the real cost of debt is higher: this is a subject particularly sensitive for a public budget encumbered of debts, as the Italian one. “Double deflation compared to the initial estimates. A sign that consumption are going down, and that families are struggling more and more to get to the end of the month,” says Massimiliano Dona, secretary of the National Union of Consumers, reading the Istat data.

To worry about, from the data today, is the fact that also considering the dynamics of the prices, net of energy goods is slowing “significantly, reaching +0.2% (was +0.5% in the previous month). Similarly, net of food products and of energy goods, the core inflation drops to +0,2% (from +0.5% in September)”.

At this point, when there are a few months to the end of the year, inflation gained for the 2016 0.1%: so you would close the year if there were further cyclical changes in the coming months. It is the same value recorded in September.

Coming to the so-called “shopping cart”, that is, the basket refers to the price of food products, for the care of the house and of the person, there is an increase of 0.1% on a monthly basis and a decrease of 0.2% on an annual basis (the change had nothing to September). The prices of the products, high purchase frequency increase of 0.1% in terms of the economic situation, and record an annual growth stable at 0.2%.