Italian inflation rate climbs to one and half-near high

Italy’s consumer price inflation accelerated to 2.0% year-on-year in March 2025, rising from 1.6% in February and exceeding market expectations of 1.6%, according to a preliminary estimate.

Italian inflation rate climbs to one and half-near high

This marked the highest inflation rate since September 2023, reflecting broad-based price increases across key sectors of the economy. The uptick was largely driven by a sharp rebound in non-regulated energy product prices, which climbed 1.3% after a 1.9% decline in February, suggesting renewed pressure from energy markets. Additionally, price growth accelerated in several other categories, including tobacco (4.6% vs. 4.1% in February), unprocessed food (3.3% vs. 2.9%), and services related to communication (0.8% vs. 0.5%). Services linked to recreation, repair, and personal care also saw a modest increase, with inflation rising to 3.3% from 3.1% in the previous month, reflecting stronger consumer demand in these segments. Meanwhile, the decline in durable goods prices eased slightly (-1.2% vs. -1.5%), indicating some stabilization in consumer goods markets.

Core inflation figures

Core inflation, which excludes volatile components such as energy and unprocessed food, remained unchanged at 1.7% in March, suggesting that underlying price pressures have not intensified despite the headline increase. On a monthly basis, consumer prices rose by 0.4%, following a 0.1% uptick in February, highlighting a stronger inflationary push at the start of spring.

Potential impact on next ECB moves

The acceleration in inflation presents a potential challenge for policymakers at the European Central Bank, as it contrasts with the easing price trends observed in other major Eurozone economies, such as Germany. With inflationary pressures persisting in Italy, particularly in essential consumer goods and services, the central bank may face increased scrutiny over its policy decisions in the coming months. Analysts will be closely watching upcoming economic data, including wage growth and business sentiment indicators, to assess whether inflation is likely to remain elevated or moderate in the near term.