A series of interactive graphs to follow the price trend over the last two years
In March, says Istat, inflation raised its head slightly: +1.2% on an annual basis. This is a small increase, higher than that recorded in January and February, but decidedly more contained when compared to the rates achieved in the recent past when the monthly growth in consumer prices had reached almost 12%, again year on year. The worst is over? Yes, maybe. But pay attention to the meaning to be given to this improvement.
To understand the difference between today and some time ago – and perhaps breathe a sigh of relief – just look at the month-by-month trend in inflation since 2020 (each percentage value is calculated compared to the previous year). What is drawn on the graph is an inverted “V”, a curve that begins to rise starting from 2021, spikes in the autumn of 2022 also as a result of the Russian invasion of Ukraine, reaches its peak in October 2022 and then begins its descent.
If you don’t see the graph, click here
Obviously not all goods and services have followed the same trajectory. If for the general index the peak of monthly growth in prices year on year settled at just under 12% (11.8 to be exact), for others the impact was decidedly higher. This can be seen by selecting the relevant sector through the menu of the graph published above. The case of energy is striking, as we well know. Gas, electricity and other fuels increased in a single month by up to 57% compared to the previous year (the maximum was also reached in autumn 2022). However, the maximum monthly growth in inflation for clothing and footwear was decidedly more contained (+3.4%). In line with the general index, that of transport, whose increase reached 14.9% compared to the previous year. Finally, the price trend for most of the period in question was negative with regards to communication.
The monthly progression of inflation calculated on an annual basis therefore draws an inverted “V”, i.e. an increase first and a decrease afterwards. However, it is important to give this line the right meaning. In fact, slowing inflation does not mean that prices are falling, but rather that prices are rising more slowly. To have an effective decline, negative inflation is necessary, i.e. a percentage preceded by a minus sign.
To avoid confusion, and to get a correct idea of the impact of the cost of living on consumer wallets, you can look directly at the price trend through the index developed by Istat. In this case, as regards the general indicator, the line shows growth from the beginning of 2021 to March 2024. Overall the index increased by approximately 20%. It means that, on average, the consumer goods and services we buy today cost a fifth more than in January 2021.
If you don’t see the graph, click here
Obviously, as we have already seen, different goods and services have had different trends. Again, the case of energy is clear, which can always be viewed via the graph’s drop-down menu. Compared to the starting figure (103 in January 2021) the corresponding index rose to 181 (a 75% increase) and then fell to 142 in March 2024. In this case, prices then actually fell compared to the peak in autumn 2022 but remain 37% higher compared to the beginning of 2021. For comparison, the trend in transport is more constant, the cost of which, to date, has increased by approximately 20% and which has followed a more regular trajectory. As for food, in the same period (January 2021-March 2024) they grew by 23% overall.
Whichever indicator you choose, the moral does not change: in the last three years, except for a few isolated sectors, prices have increased. It happened in Italy, as we know from direct experience, but also in the rest of Europe, as can be seen in the following graph. If we choose to compare the four largest economies of the EU, for example, we will in fact find similar trends. Italy, Spain, France and Germany have all seen the cost of living increase in similar proportions and at very similar rates.
If you don’t see the graph, click here
