Italy Inflation Slows to Lowest Level in a Year, Below Euro Area

(Bloomberg) -- Italy's inflation slowed last month as the economy sought stronger footing ahead of March elections.

Consumer prices based on European Union criteria rose 1 percent from a year earlier, the slowest pace since January 2017, national statistics agency Istat said in a preliminary report Friday in Rome. The December reading was down slightly from the 1.1 percent in November, which was also the median forecast of six analysts in a Bloomberg News survey.

“The headline rate of inflation slipped a touch in December, but the decline mostly reflects movements in categories of spending that are unrelated to the margin of slack in the economy,” Bloomberg economist Jamie Murray said after the Istat data were released. “Still, the outlook for underlying cost pressure remains weak, with the output gap likely to remain open in the next couple of years.”

Italian consumer prices rose 0.3 percent on a monthly basis last month, and average inflation was 1.3 percent last year. The numbers echoed a 1.4 percent slowing of euro-area inflation in December.

Istat said transport services, personal care and some foods helped push up prices in December.

Italy's economy is recovering from its longest recession since World War II, and the nation's executives in a report last month predicted growth will maintain its pace this year. Consumer confidence rose to the highest in almost two years last month.

Political parties are campaigning for national elections on March 4, just two months from now.

--With assistance from Andre Tartar

To contact the reporter on this story: Kevin Costelloe in Rome at kcostelloe@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Alessandra Migliaccio, Giovanni Salzano

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