Italy: Harmonized inflation rises in January
Latest reading: Harmonized inflation rose to 1.7% in January from 1.4% in December, marking the highest inflation rate since October 2023. Looking at the details of the release, prices for housing and utilities plus transportation costs rose at a quicker pace.
Accordingly, the trend pointed up slightly, with annual average harmonized inflation coming in at 1.2% in January (December: 1.1%). Meanwhile, consumer price inflation rose to 1.5% in January from December’s 1.3%.
Lastly, harmonized consumer prices dropped 0.73% from the previous month in January, swinging from the 0.08% rise seen in December. January’s result marked the weakest reading since July 2024.
Panelist insight: Commenting on the outlook, ING’s Paolo Pizzoli stated:
“Looking ahead, over the rest of 2025 headline inflation remains exposed to multiple factors. Energy prices will be a key one. […] Should EU gas storage depletion concerns and some optimism about a possible end to the war in Ukraine balance out, the energy impact on inflation could remain limited to the next few months. The Italian government is about to approve a decree intended to soften the blow of energy prices on households and businesses. Should this include a temporary downward revision of VAT on electricity bills, it would further limit the scope for upward inflation pressure stemming from energy.”