The annual inflation rate in Italy edged higher to 2.0% in April 2025 from 1.9% in the previous month, matching market expectations and marking the sharpest uptick in 19 months.
Italian inflation rises as expected in April
The increase extends the ongoing normalization of price growth across key components of the Italian consumer basket, following a prolonged period of volatility triggered by the post-pandemic recovery and successive energy and food supply shocks linked to the war in Ukraine. The April print reflected rising pressures in several categories, suggesting that inflationary dynamics remain uneven and sector-specific.
Prices for regulated energy surged 32.9% year-on-year, accelerating from a 27.2% rise in March, as state-imposed tariff adjustments caught up with past increases in wholesale electricity and gas costs. Transportation services inflation also climbed notably to 4.4% from 1.6%, likely reflecting higher fuel surcharges, seasonal demand, and lingering supply chain constraints. Food inflation added to the upward momentum, with fresh food prices rising 4.2% (vs. 3.3%) and processed food prices up 2.3% (vs. 1.9%), highlighting the continued pass-through of agricultural input costs and labor-related pressures.
Non-regulated energy prices declined
In contrast, non-regulated energy prices posted a decline of 2.9% year-on-year, reversing from a modest 0.7% increase in March. The fall reflects both favorable base effects and recent declines in global oil prices, offering a partial offset to broader inflationary forces. Still, the underlying inflation picture showed signs of re-acceleration, with core inflation—excluding volatile energy and unprocessed food—rising sharply to 2.1%, the highest in a year, from 1.7% previously.
On a monthly basis, consumer prices increased by 0.2%, pointing to continued, albeit moderate, price momentum. While overall inflation remains within the European Central Bank's target zone, the broad-based rise in core components could raise concerns about entrenched price pressures in services and essentials, especially given Italy’s high public debt burden and fragile consumer sentiment. For households, the inflation rebound poses new challenges, particularly for lower-income groups already strained by previous price surges.
As a result, policymakers will be watching closely to determine whether this rise is a temporary blip or an early signal of more persistent price pressures, especially as the ECB weighs its next steps in a complex and diverging eurozone inflation landscape.
