The Istat picture: it is frozen on inflation in Italy. But growth is at zero


By John

GDP stuck at zero growth and inflation falling from 5.3% in September to 1.8% in October, recording a slight contraction of 0.1% compared to the previous month. It is the effect of the slowdown in energy prices and to a small extent in food prices. This is the chiaroscuro picture provided by Istat which updates two important indicators for Italy and reports that the values ​​acquired stop at +0.7% for GDP and . But, at the moment, it is a better situation than the European one where the eurozone product, again in the third quarter, instead fell by 0.1% while consumer price growth slowed in October, but it stood well above the Italian average, marking +2.9%. The government, grappling with the maneuver, claims the result but also expresses some concern. Consumers and traders’ associations declare themselves alarmed by the slowdown in growth and, at least the former, speak of an “optical effect” for the collapse in prices: it largely depends on energy and compares statistically with the stratospheric level of last year Just look petrol, which recorded a decline in this period, now marking a self-price of 1.871 euros to understand the impact of energy goods, so much so that even in Istat data the shopping cart slows down in October but goes from 8.1% to 6.3%, a decidedly higher value than the overall index.

While this is a breath of fresh air on prices, concerns are growing on the growth front. Prudence is expressed by the EU Commissioner for Economic Affairs Paolo Gentiloni which invites all partners to be careful by speaking of “a transition phase in which caution in spending and support for investments are needed”. And the governor of the Bank of Italy, Ignazio Visco, in its latest release, warns that economic estimates hover with risks “oriented towards the downside, especially due to the worsening of geopolitical tensions and the tightening of financing conditions”, i.e. the latter effect of the recent monetary tightening. The Minister of Economy, Giancarlo Giorgetti, seems to breathe a small sigh of relief weighed down as it is by debt management: “the system has managed to hold up in the face of the concomitance of many critical factors”. The Minister of Business and Made in Italy is instead enthusiastic, Adolfo Urso, which draws attention to the “tricolor cart” in the drop in prices and thanks the entire supply chain “for this proof of cohesion and solidarity. A full and extraordinary success.” But who takes the piqued reply of the CGIL: «Urso mystifies reality. The tricolor cart is useless, if not worse.”

Consumers aren’t happy either: the drop must be compared with the very high level of last year (around 12%) and the shopping cart even rose by 0.1% instead of falling like the general index. And it’s still at a very high level. In short, the abrupt reduction is only an “optical effect” and is due – says Codacons – “solely to the drastic reduction in the prices of energy goods”. And even for energy there are risks: “the situation could soon change: – says Assoutenti – the war that broke out in Israel has caused energy prices to rise above 50 euros per megawatt hour”. Federconsumatori also speaks of an “illusion”, recalling that “the comparison takes place with respect to a period in which the inflation rate recorded a very strong increase, reaching peaks of 12%”. Unc points the finger directly at Urso’s initiative: “Compared to September the prices of food products, i.e. those affected by the spending-saving pact, actually rise instead of falling in price, +0.1%”.

Organizations such as trade and crafts are concerned about the stopped economy. In fact, Istat records a negative contribution from demand. In practice of consumption. The stagnation of the product – explains Confcommercio – «seems to be due to the insufficiency of demand for consumption, conditioned by the loss of purchasing power in turn caused by the high inflationary dynamics of recent months. The target of 0.8% growth is moving away.” A growth that Confesercenti estimates could stop at 0.6% this year. “The confirmation of the slowdown in price growth continues to be contrasted with a situation of weakness in consumption,” Federdistribuzione points out. Finally, for Cna, “our country needs investments to get back on the path to development.”