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Inflation Down in November: Positive Trend in Italy and the Eurozone

Preliminary estimates from Istat confirm the inflation down in November, with a 0.4% decrease on a monthly basis and a 0.8% increase on an annual basis, marking the lowest value since March 2021. The positive news is accompanied by a slowdown in the cost of living, with an annual growth of 5.8%, compared to the previous month’s 6.1%.

Inflation Down: Price Trends and Determining Factors

The decline in inflation reflects a favorable trend in the prices of energy goods, positive dynamics in some service sectors, and a deceleration in the prices of food items. In particular, prices for food, household, and personal care products show an increase of 5.8%, down from the previous month’s 6.1%.

European Scenario: Declining Inflation in the Eurozone

Italy is not the only one benefiting from this downward trend. Throughout the Eurozone, inflation falls to 2.4% from October’s 2.9%, primarily influenced by the decline in energy prices. This positive data could favor a softening of monetary policy, according to the Governor of the Bank of Italy, Fabio Panetta.

Economic Implications: Positive Trend

Inflation nearing 2% is well-received by the Central Bank, aiming to bring price increases around this threshold. This development favors a softening of monetary policy, avoiding further financial constraints. However, Panetta warns that the duration of the restrictive phase of monetary policy could be influenced by the persistent weakness in economic activity.

European Trends: Rates Falling in France and Germany Too

The downward trend is not limited to Italy; even in France and Germany, inflation shows a significant decrease. In France, inflation falls to 3.4% from October’s 4%, while in Germany, there is a slowdown exceeding economists’ expectations, with prices decreasing by an average of 0.4%.

Inflation Down Across the Eurozone: In-Depth Analysis

Analyzing inflation across the entire Eurozone, Eurostat data highlights a descent to 2.4% from October’s 2.9%. This decline is mainly attributable to a further drop in energy prices, which decreased by 11.5% from October. Additionally, though still growing, prices in the food-tobacco sector show a slowdown compared to the previous month.

Central Bank Comments and Future Perspectives

The Governor of the Bank of Italy, Fabio Panetta, positively comments on the decline in inflation, emphasizing it as good news for the Eurozone. However, he warns that the duration of the restrictive phase of monetary policy could be influenced by the persistent weakness in economic activity.

In-Depth Analysis of Italian Data

Examining Italian data more closely, Istat estimates show that the deceleration of inflation in November is mainly due to energy prices and food. Specifically, both regulated and unregulated energy prices show significant reductions, contributing to the overall inflation decline.

Inflation Down: Social and Economic Implications

The reduction in inflation can have positive implications for households and businesses, reducing pressure on prices and improving purchasing power. However, it is essential to closely monitor the evolution of economic activity and ensure that this positive trend continues in the medium term.

Conclusions: Positive Outlook and Challenges

In summary, the decline in inflation in November is good news for the Italian and European economies. However, persistent economic challenges require attention, and the evolution of economic activity will continue to influence decisions on monetary policy. Future developments in inflation and the European economy will be closely monitored, providing timely updates on evolving dynamics.

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