Tuesday, 6 January 2009

Inflation hits 12- year high in 2008

Istat and consumer groups differ on annual rate
(ANSA) - Rome, January 5 - Italy's annual inflation rate in 2008 averaged out at 3.3%, its highest in 12 years, national statistics bureau Istat reported on Monday.

In 2007 Italy's inflation rate was 1.8%.

Istat's inflation figure for 2008 was contested by consumer groups Adusbef and Federconsumatori which claimed that the rate for 2008 was 5.9%.

The consumer groups also calculated that inflation cost the average Italian family an additional 1,800 euros last year.

Istat reported on Monday that Italy's year-on-year inflation rate in December fell to 2.2%, down from 2.7% in November, with a 0.1% monthly decline in the cost of living index.

Istat explained that the year-on-year decline was due to a 16.2% drop in energy costs, which fell 4% over November.

Unleaded fuel prices, for example, declined 8.1% from November to December and were 16.3% lower than December 2007, while diesel prices last month were down 7.6% for the month and 12.7% for the year, Istat said.

The surge in pasta prices subsided somewhat in December but remained 28.2% higher than the same month in 2007, as opposed to a 29.8% year-on-year hike in November.

Compared to last November, pasta prices in December diminished 0.2%.

Bread prices in December were down 0.1% for the month and up 3.4% for the year.

Prices also slowed last month for milk, cheese, eggs and meat, Istat said.


''Last year was a horrible one for Italian families. Prices began to decline only in the last months of the year and this was due to a drop in consumer spending,'' Adusbef and Federconsumatori said in a joint statement. The consumer groups explained that much of the additional 1,800 euros families were forced to spend was due to the high cost of maintaining a home with increases over the previous year of 12.6% for electricity, 13.1% for gas, 10.9% for water and 14.6% for refuse disposal. Added to this was a 9.4% hike in the cost of food for the year, the groups said. Aside from these additional costs, families were forced to pay more for mortgages if they took out loans at a variable rate, the groups observed. The consumer group Codacons on Monday predicted that in 2009 families will be forced to spend an additional 605 euros due to rising costs, especially for food and housing. INFLATION DROP TO OFFER RELIEF TO FAMILIES, MINISTERS SAYS.

The decline in inflation recorded last month will give some relief to family budgets, according to Industry Minister Claudio Scajola.

''The significant drop in fuel and utility costs, coupled with those for food, will continue in the coming months. This means that in 2009 families will spend less than in 2008 and will be able to maintain their standard of living and spending habits,'' Scajola said.

He went on to explain that the drop in inflation was Europe-wide and would create the conditions for a further cut in interest rates, which in turn would help boost the sagging economy.

The improved economic situation was already apparent in the sustained level of retail business recorded at Christmas and now during the post-holiday sales period, Scajola added.

''What we need to do now is increase our efforts to curb the recession and support economic growth and employment,'' the minister said.

No comments: