Inflation: You are all poorer than a year ago. Now we tell you whose fault it is …

17 January 20222 years ago babelfish

We finally have the preliminary data on inflation in Italy in December, on an annual basis, and there is very little to be happy about, both for the figure in an absolute sense and for its main component.

Italy's annual inflation rate accelerated to 3.9 percent in December 2021, the highest reading since September 2008, from 3.7 percent the previous month and in line with preliminary estimates. Food and soft drink prices rose (2.9 percent versus 1.5 percent in November), driven up by unprocessed food (3.6 percent versus 1.5 percent), housing and utilities (14.4 percent vs. 14.1 percent) and restaurants and hotels (3.5 percent vs. 2.7 percent). At the same time, the prices of energy products have grown at a slower but enormous pace (29.1 percent versus 30.7 percent), but only because of a slowdown in the growth, but still growth, of prices for unregulated energy products (22 percent versus 24.3 percent) . The annual core inflation rate, which excludes energy and unprocessed food, rose to 1.5% from 1.3% in November, but remains very low, indicating that this is an external factor, not a excessive economic growth . On a monthly basis, consumer prices rose 0.4 percent from a 0.6 percent increase the previous month. At the same time, the harmonized index advanced 4.2% over the year and 0.5% over the month.

It is evident like the sun, especially from the reading of Core inflation, i.e. without fresh food and energy, that the dynamics are linked to the prices of fuels, gas, petroleum products etc. There is no wage dynamic, there is no excess of economic activity: they simply presented us with a stratospheric electricity and gas bill, and we are paying it. So, unlike the 70s and 80s of the last century, when inflation, even higher, was followed by an increase in wages, even if perhaps not perfect, and then in the end it was anesthetized this time you can find it all on your wallets, and dryly translates into a decline in your purchasing power. You are all poorer than the previous year .

Obviously this poverty effect carried over to retail sales and consumption, which were already languishing and even without Omicron, with a decline in November. We will see December, but it will be disappointing

Whose faults are they? He gets busy making a list:

Of those who set up the European energy policy by making the carbon transition (i.e. by imposing new taxes on CO2 emissions), without making any impact assessment of Covid-19 on energy consumption. No one, really no one, neither in Brussels nor in Rome, has bothered to make hypotheses, to create scenarios, on what could have happened after Covid when the economy resumed. It went on anyway, like a train, and these are the consequences.
Who is setting up an aggressive policy against Russia after making European countries dependent on Russian gas. We are practically choking on our hands. Or rather they are strangling you because I assure you that those who manage these decisions do not suffer the slightest relapse.

So you have all the data to understand if you like.

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The article Inflation: You are all poorer than a year ago. Now we tell you whose fault it is… it comes from ScenariEconomici.it .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/inflazione-siete-tutti-piu-poveri-rispetto-a-un-anno-fa-ora-vi-dicamo-di-chi-e-la-colpa/ on Mon, 17 Jan 2022 14:37:31 +0000.