New inflation figures Tuesday
strengthened hopes the Italian economy may be pulling faster out
of recession.
The data were especially welcome on a day when Italian
public debt hit a new high.
Until recently Italy had been in deflation with some
fearing a Japanese-style slide into long-lasting doldrums where
the economy flatlines.
But the consumer price index has started rising again,
nurturing hope that a timid recovery may grow, meeting the 0.6%
target the government has set this year.
Analysts said the European Central Bank's programme of
quantitative easing (QE), or injecting liquidity into the
eurozone economy by large-scale long-term bond buying, had also
helped keep prices up as intended.
June inflation rose to 0.2%, up 0.1% over May, Istat
national statistics bureau said Tuesday.
Culture, recreation and personal care drove prices upwards
as part of a so-called "holiday factor", Istat said.
National holiday package prices rose 1.8% over the same
period last year and by 6.8% over May, according to the Istat
data.
International holiday packages were stable over 2014 and
added 3.6% over May. Holiday villages, camp sites, hostels and
similar accommodations rose 10.7% on the month and by 0.6% on a
yearly basis, Istat said.
The statistics agency added the northeast was the only part
of Italy suffering from deflation in June, with prices falling
by 0.1% over May.
The northwest and the central regions saw inflation rise
0.4%, with prices up 0.2% in the south and on the islands.
As for regional capitals, Milan led the rise at +0.6%,
followed by Genoa and Bolzano (+0.5%).
But there was still some deflation around.
The biggest deflation rates were seen in (-0.7%), Venezia
(-0.6%) and Catanzaro (-0.3%).
Italy's public debt hit a new record in May of 2.2181
trillion euros, the Bank of Italy said Tuesday.
The debt rose 23.4 billion euros in the month of May alone
because of increased Treasury liquidity, the fall in the euro
and the conditions of the bond markets.
The debt has risen 3.9% in the first five months of the
year, the central bank said.
Italy's public debt is some 135% of GDP and is the
second-biggest in the eurozone behind Greece's.
It is the main reason why Italy is sometimes cited as
having one of the economies most prone to possible contagion
from the Greek debt crisis.
In other economic news Tuesday, consumer groups Adusbef and
Federconsumatori said the costs on Italians due to the politics
of austerity have increased public debt by 302 billion euros
since November 2011.
The two associations released figures analyzing the impact
of debt from the most recent Italian governments - Monti, Letta,
and Renzi - and said the debt amounts to a "hidden tax of 5,067
euros" on every Italian citizen.
The groups said austerity has "mortgaged the future of new
generations".
Meanwhile German industrial employers' confederation BDI
President Ulrich Grillo told ANSA on Tuesday that Italy is "on
the right road, but mustn't give up," and the country "still has
a long way to go".
Grillo said Italy has "great potential" and Premier Matteo
Renzi "has leadership, 'esprit,' he's motivated and can bring
people with him".
In other news, the Bank of Italy reported that Italian tax
revenues remained stable for the first five months of 2015,
growing just 0.6% on the same period in 2014.
Tax revenues between January and May 2015 amounted to 146.2
billion euros, compared with 145.4 billion euros in the same
five months of 2014.
Tax revenue in May 2015 totaled 31 billion euros, virtually
unchanged when compared to May 2014.
And Italian banks' gross non-performing loans (NPLs) rose
in May to 193.7 billion euros, up from 191.6 billion euros in
April, according to a monthly report from the Italian banking
association (ABI).
ABI said that bad loans accounted for 10.1% of total
lending by Italian financial institutions in May (compared to
8.9% one year earlier and 2.8% at the end of 2007).
The issue of NPLs is high on the Italian government's
priority list as it seeks ways to reduce the burden of problem
loans for banks without violating European Union rules.
The government hopes that fewer NPLs on banks' books will
free up lending and contribute to the nascent economic recovery.
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