by Carlo Marroni
In December the national consumer price index increased by 0.2% on a monthly basis and by 0.6% on an annual basis (from +0.7% in the previous month)
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The declining phase of inflation continues: in December it fell to +0.6% from +11.6% in December 2022 and on average in 2023 prices increased by 5.7%, a clear slowdown from 8.1%. % of 2022. These are Istat data from which it emerges that in December 2023 the national consumer price index for the entire community (including tobacco) increased by 0.2% on a monthly basis and by 0.6% on an annual basis (from +0.7% in the previous month), confirming the preliminary estimate.
Net of energy and fresh food (“underlying inflation”), consumer prices grew by 5.1% (+3.8% in the previous year) and net of energy alone by 5.3% (+ 4.1% in 2022), explains the Institute. The slowdown on a trend basis in inflation is mostly due to the prices of regulated energy goods (which accentuate their decline from -34.9% to -41.6%), underlines Istat.
2023 produced little inflation
This emerges from a more in-depth reading of last year’s data: in the end only an actual +0.5%, the rest was a legacy of the terrible 2022. Istat confirms the December growth of +0.6% and an annual average of 5.7%, and the legacy towards 2024 is minimal, +0.1%, even if that of food is certainly greater, +1.3%, which will be reflected in the trend of the shopping cart. But to fully understand what has happened in the last two exceptional years, various aspects must be analysed. After recording a slight decline in 2020 (-0.2%), the following year inflation rose significantly to just under two percentage points (1.9%), and then accelerated rapidly in 2022 when growth annual average consumer prices were 8.1%. Since the end of the year, the cyclical phase of inflation acceleration has come to an end, and the growth rate of consumer prices has begun to slow down, ending at 5.7%.
The weight of fresh food
The slowdown in inflation is the result of the waning of upward pressure on prices, although, at least in the first part of last year, in some sectors the upward tensions had a supporting effect on the inflationary dynamic. Overall, much of the inflation recorded in 2023 appears to be the effect of the legacy (5.1%) left by the rise in prices of the previous year. Inflation itself – as mentioned – is in fact very moderate (0.5%) and the carryover to 2024 is almost nil (+0.1%). At a greater level of detail, as regards food goods, the own component is rather marked (4.4%) with a carryover to 2024 of 1.3%, 1.9% for fresh food alone, the most sensitive. For services, inflation in 2023 (2.5%) explains more than half of the average annual growth in prices in the sector (4.2%) and determines a carryover to 2024 of 0.8%.
The acceleration of inflation in 2022
The acceleration of inflation in 2022 was accompanied by a rapid increase in the spread of upward pressures. With reference to over 400 product aggregates that make up the consumer price basket, in January 2021, 80% recorded trend changes in price between -2.1% and +2.8% (half of the products were between -0.2% and 1.5%). One year later, in January 2022, 80% of the products show variations between -0.8% and 9.8% (half of the aggregates between 0.6% and 3.4%), while a October of the same year (in which the peak of inflation was recorded), the extremes of the range are equal to 0.4% and 19.9% (between 2.3% and 10.2% the width of the range which includes half of the products).
The reduction in 2023
In the 2023 phase, the spread of increases is progressively reduced. Between January and December, the threshold that delimits the extreme tail of the distribution is almost halved: at the beginning of the year, in fact, the 10 percent of products with the highest price growth rate recorded increases of no less than 17.5%. , while in December the same share showed increases of no more than 8.9%. in terms of weight, in 2022, the incidence of price decreases, after having significantly reduced in the previous year, remained at values just above 11% (with a clear prevalence of more moderate decreases, ranging between zero and -5%). In the same year, the weight of products showing price increases greater than 10% increased from 12.6% in January to 22.7% in December. In particular, increases above 20%, which at the beginning of 2022 represented 4.9% of the weight of the basket, come to weigh 8.1% in December. In 2023, the weight of products with falling prices will it more than doubled, going from 7.3% in January to 15.5% in December, with a significant increase in the weight of the most marked price reductions (those greater than 5%). On the other hand, the weight of products recording price increases of more than 10% fell from 22.4% to 2.9%. The decline was more marked due to price increases exceeding 20%, the incidence of which went from 8.8% in January to 1.1% at the end of the year. On average in 2023, consumer prices were 16.2% higher than in 2019.
Sharper increases for energy goods
With reference to product types, the most marked cumulative increases were recorded for energy goods (59.4%), unprocessed food goods (21.7%) and processed foods (21.5%). Significantly more moderate growth rates were recorded by Tobacco (6.3%), Housing-related Services (6.4%) and Various Services (6.9%). On the other hand, a moderate decline was recorded for communications-related services (-0.4%). Considering the distribution by classes of percentage size of the cumulative price variation, approximately one third of the basket (in terms of weight) shows increases that are around the average figure: the products which, in the period considered, record an increase of between 10 % and 20% together account for 32.7% of the total. Between 2019 and 2023, more than a fifth of the basket (22.6%) shows increases of more than 20%. Of these products, approximately half (10.9%) belong to the Food Goods sector, and approximately a quarter to the Energy Goods sector (5.4%).
From sugar to milk, the products with the highest price increases
Among the food products with the highest price growth rate in the period 2019 – 2023 are sugar (64.8%), rice (+50.0%), olive oil (42.3%), pasta dry (40.1%), butter (36.5%), whole milk (21.9%). Price drops affect just under 10% of the basket. Among the products with the greatest drop in price are devices for receiving, recording and reproducing images and sounds (-45.7%) and smartphones (-36.7%). Between the years 2019 and 2023, the harmonized index of consumer prices recorded a change of 17.2%. In the same period of time, the cumulative growth of the general index calculated for the first subpopulation (lowest level of equivalent expenditure) was equal to 21.7%. With reference to the last group of families (with the highest spending levels), the cumulative inflation rate is equal to 15.2%. The widest inflation differentials between the first and last subpopulation are recorded for energy goods (+69.6% and +56.1% respectively), for various services (+9.3% and +6.5 %) and for processed foods (+20.9% and +18.5%). On the contrary, a relatively more marked dynamic for the last group of families is recorded for Other goods (+11.1% for the wealthiest families compared to 7.0% for those with lower spending capacity), for Services relating to transport (in the order 11.8% and 8.9%) and for recreational, cultural and personal care services (+14.1% compared to +11.9%).
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2024-01-16 11:03:45
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