Consumer prices in Italy increased by 6.7 percent year-on-year in June. The rate of increase thus slowed from May’s eight percent and was the lowest in 14 months, thanks to weaker energy price growth and cheaper transport costs.
Weakening pressures
Data from the eurozone’s third-largest economy suggest that price pressures in the region could be easing. But inflation in Italy remains well above the European Central Bank’s target of two percent. ECB chief Christine Lagarde indicated on Tuesday that the bank would continue to raise interest rates in the eurozone.
But the prospect of further monetary tightening drew immediate criticism from two Italian deputy prime ministers. The most strident was Matteo Salvini, who said the ECB’s policy was “senseless and dangerous”. Today, Italian Prime Minister Giorgia Meloni herself joined the criticism, calling the central bank’s actions “simplistic”.
Deterioration in the dynamics
Statements from Italy’s top officials indicate the state of affairs the country is now in. Persistently high prices for staple foods such as pasta, tomatoes and olive oil are a problem for a government that has been slow to end measures to help families and businesses hit by the energy crisis. Higher borrowing costs to curb inflation are putting a strain on the country’s tight public finances, hurting consumers as borrowers and taxpayers, while also having a negative impact on economic growth. Italy’s main business association warned earlier this week that the economy was showing signs of weakening momentum, Bloomberg pointed out.
Source Czech Press Office
