March 30 (Bloomberg) -- Italy’s inflation rate unexpectedly rose to the highest in five months in March as surging energy costs and increased taxes more than offset the effect of the slumping economy on prices.
The inflation rate based on European Union measurements rose to 3.8 percent from 3.4 percent in the previous month, Rome-based national statistics office Istat said in a preliminary report today. That was more than the median forecast of 3.3 percent by 16 economists in a Bloomberg News survey. March prices rose 2.5 percent from the previous month after seasonal sales ended.
The government’s austerity plan raised value-added taxes and increased tariffs on gasoline, which coupled with rising crude prices led to a jump in gasoline costs that topped a record 1.90 euros ($2.50) a liter this week. Italy’s economy has slipped into its fourth recession since 2001 in the first quarter and unemployment rose to the highest in more than 10 years.
Inflation in the euro-area also as the economy showed signs of contraction and governments cut spending across the 17-nation currency region. The inflation rate in March fell to 2.6 from 2.7 percent in February, the European Union’s statistics office in Luxembourg said today. Economists had forecast inflation of 2.5 percent, the median of 39 estimates in a Bloomberg News survey showed.