The inflation rate in Italy fell in May as a decline in energy costs left consumer prices unchanged from the previous month.
The inflation rate based on European Union measurements fell to 3.5 percent from 3.7 percent in April when it reached a seven-month high, Rome-based national statistics office Istat said in a preliminary report today. That was less than the median forecast of 3.6 percent by three economists in a Bloomberg News survey. Prices were unchanged from the previous month.
Crude oil prices fell almost 14 percent in May, leading to a drop of 0.9 percent in transportation costs in Italy from the previous month. That was the biggest drop of any category of goods and services that make us the index.
Italian gasoline prices had climbed to the highest in Europe after Monti’s government increased taxes on the fuel as part of its 20 billion-euro ($25 billion) austerity package passed in December. A drop in demand and the drop in crude prices helped bring down gasoline costs in recent weeks.
Prices of the fuel will rise again after the government yesterday introduced an additional levy on gasoline to help fund reconstruction in the northern regions hit by two fatal earthquakes this month.
In April, producer prices rose 2.5 percent from a year earlier and 0.3 percent from the previous month, Istat said yesterday.
Italy’s consumer confidence plunged this month to the lowest, crimping domestic demand. Business confidence also declined this month to the lowest since August 2009, amid concerns the recession that began in the fourth quarter may deepen, Istat said May 28.
Industrial production will decrease 0.6 percent this month, after falling 0.5 percent in April, as the earthquakes weigh on the economic outlook with “lasting” consequences on output, Rome-based employers lobby Confindustria said yesterday.
Based on Italian methodology, prices were unchanged in May from the previous month and advanced 3.2 percent from a year earlier, Istat said today.