FX.co ★ Italy Inflation Rate Lower Than Initially Thought

Italy's annual consumer price inflation decelerated to 1.6% in May 2025, coming in below the preliminary forecast of 1.7% and decreasing from the 1.9% recorded in April. This marks the lowest inflation rate since February and remains under the European Central Bank's 2% target for the twentieth month running, highlighting ongoing disinflationary pressures in the eurozone's third-largest economy. The primary factors for this slowdown include reduced price growth in regulated energy goods, which fell to 29.3% from 31.7% in April, unprocessed food prices decreasing to 3.5% from 4.2%, and slower inflation in recreational, cultural, and personal care services at 3.1% compared to 3.6%, along with transport-related services dropping to 2.6% from 4.4%. Meanwhile, prices for non-regulated energy goods continued to decline, registering at -4.3% compared to -3.4%, and durable goods experienced a decrease to -1.1% from -1.4%. Conversely, inflation for processed food products saw an uptick to 2.7% from 2.2%. On a month-over-month comparison, consumer prices edged down by 0.1%, in contrast to a 0.1% rise in April, and against an initial estimate of no change.