Eurozone inflation holds at 3 per cent in April; Italy jumps 1.2 percentage points

Brussels – Inflation in the eurozone stood at 3 per cent in April, up 0.4 percentage points on March. Eurostat confirms the preliminary data on the cost of living, which does not bode well for Italy: final data indicate that inflation in Italy is running at three times the eurozone average. Between March and April, the Italian index rose by 1.2 percentage points, reaching 2.8 per cent (from 1.6 per cent). Among the major economies of the EU countries using the single currency, only Italy recorded such a marked rise in inflation in a single month, with minimal changes in Germany (at 2.9 per cent, +0.1 percentage points from February) and in Spain (at 3.5 per cent, +0.1 percentage points), while in France the increase is half a point (from 2 per cent to 2.5 per cent), but still lower than the Italian figure. 

Energy is driving overall and national price rises. According to the reference basket, as confirmed by the European Statistical Institute, it stands at 10.8 per cent (compared to 5.1 per cent in March, and slightly lower than the 10.9 per cent in preliminary estimates). There was a slight increase in the non-energy industrial goods category (0.8 per cent, up from 0.5 per cent in March). The trend for food, alcohol, and tobacco remained stable (2.4 per cent), but the cost of unprocessed food rose by 4.6 per cent (+0.4 percentage points from March). Inflation for services, however, fell slightly (3 per cent, compared with 3.3 per cent in March).

The final inflation figures are likely to have a negative impact on Italy, which has the second-highest public debt in the European Union – a figure expected to rise – and which could bear the brunt of the energy crisis caused by the war in Iran in terms of productivity and growth. Tomorrow (21 May), the European Commission will present its spring economic forecast, outlining both general and specific expectations. Italy is effectively already under special surveillance, with the spotlight already on its public finances. In this context, high inflation could curb domestic consumption and weigh on supply.