Lorenzo Macchi
Research expert covering society, economy, and politics for Italy
Inflation and consumer price indexes in Italy - statistics & facts
In 2024, 80 percent of Italians consider inflation to be the country’s most pressing problem to be addressed by the government, surpassing healthcare and illegal immigration, two topics which have largely dominated the public debate lately. Italy was severely hit by the upsurge of energy costs, being highly dependent on the import of fossil fuels for the production of electricity. In August 2022, electric power reached almost 550 euros per megawatt-hour, more than in any other European Union (EU) country. Moreover, the inflation rate hit 8.2 percent, the highest recorded among G7 member states. This increase mirrored a worldwide energy crisis, which affected the global economy as a consequence of the COVID-19 pandemic and the Russian-Ukrainian conflict.
How is inflation in Italy measured?
The National Institute of Statistics (Istat) calculates the Consumer Price Index (CPI) to regularly monitor price changes, based on a basket of 1,915 goods and services selected to realistically reflect the consumption habits of the Italian citizens. For 2024, the Institute included laminate floors, all-you-can-eat meals, smart light bulbs, and dehumidifiers, while electric hair trimmers and e-book readers were considered no longer relevant. 385,000 statistic offices participated in data collection to assure that the analysis matches nationwide price variations. Alongside CPI for the whole nation (NIC), Istat elaborates CPI for blue- and white-collar worker households (FOI), including only families with an employee as breadwinner, and the Harmonized CPI (HCPI), according to EU common standards. Another relevant indicator is the Producer Price Index (PPI), which reflects the costs that firms undertake during procurement, production, and sales. As price fluctuations often hit manufacturers first, inflation for end users can be predicted from PPI.A serious risk for blue-collar workers and for the unemployed
Inflation significantly impacted on Italian households and their consumption habits, as salaries were not adjusted, with a consequent loss of purchasing power for families. Electric energy and natural gas were the main drivers of the inflationary crisis which affected the country between 2021 and 2022. This sharp jump then spread to other goods categories, food in particular, and in October 2022, the highest CPI increase since at least 1984 was recorded. Consumers belonging to the working class suffered the most from the soaring prices, as more than 60 percent had to reduce their electricity consumption and curtail grocery shopping. Additionally, inflation severely hit the unemployed and the elderly, who cut the purchase of unnecessary products and tried to prevent food waste to cope with more expensive prices. Without targeted provisions to combat the inflationary phenomenon, the situation for these most vulnerable social classes will worsen, with the dramatic prospect of falling below the poverty threshold, which has been persistently growing recently.The response by the government
With the purpose of addressing the negative consequences of rising prices, the Italian government enacted anti-inflation measures within the framework of the budget law 2023. The executive allocated beyond 21 billion euros for mitigating the energy costs, by extending a tax credit for small businesses, and confirming substantial subsidies on electricity bills for the poorest households. Moreover, 500 million euros were earmarked for shopping vouchers to be assigned to low-income families for purchasing first necessity goods. In September 2023, the government promoted the “Anti-inflation quarter”, during which participating retailers offered selected essential products and consumer goods with a price cap, with a commitment to keeping it stable. Despite these efforts, the majority of Italians considered these initiatives insufficient to secure them against the inflationary crisis.
