Italy Feb EU-harmonised CPI slows less than forecast to 9.9% y/y
By Antonella Cinelli
ROME (Reuters) - Italian EU-harmonised consumer prices (HICP) eased in February on lower energy prices but still came in above expectations, with core inflation accelerating further, data showed on Thursday.
The HICP index stood at a preliminary 0.2% month-on-month in February, with annual inflation slowing to 9.9% from 10.7% in January, ISTAT said.
The annual reading was above the median forecast for 9.4% in a Reuters survey of 13 analysts.
Core inflation (net of fresh food and energy) was running at 7.1% year-on-year on the HICP index in February, up from 6.6% the month before.
ITALY'S CORE INFLATION https://fingfx.thomsonreuters.com/gfx/mkt/gdvzqmbqqpw/INFLAZIONE-FONDO.png
Italy, which is highly dependent on imports for its energy needs, has seen inflation rise faster than many of its euro zone partners as international gas prices have soared.
Now gas costs are declining, Italian inflation should fall more steeply than in most of the euro zone, said Loredana Federico, chief Italian economist at UniCredit.
ITALY'S DISINFLATION https://fingfx.thomsonreuters.com/gfx/mkt/klpygnzaepg/UNICREDIT.PNG
ISTAT data confirm the ongoing deceleration, said Federico, with energy prices slowing to a rise of 28.2% year-on-year last month from 42.8% in January.
She noted that the surprise compared to UniCredit's expectations "mainly affected the food price component, with growth remaining sustained in February. In particular, the downward trend in prices of fresh food on a year-on-year basis was interrupted".
Official statistics agency ISTAT also reported that the main domestic price index (NIC),stood at 9.2% annually in February, decreasing from a 10.0% annual rate in January.
It was not only in Italy that prices fell less than expected.
Euro zone inflation eased to 8.5% in February from 8.6% a month earlier, above expectations for 8.2% in a Reuters poll of economists, and the underlying inflation, an indicator closely watched by the European Central Bank, jumped to 5.6% from 5.3% in January.
"The latest HICP figures make grim reading for the ECB and bring a 75bp rate hike into play for the upcoming meeting on 16 March", said Ken Wattret, Head of European Analysis and Insights at S&P Global Market Intelligence.
(Reporting by Antonella Cinelli, editing by Alvise Armellini and Keith Weir)