Italian deflation grows to -0.2% - update 2

September rate worse than Istat's forecast of -0.1%

(ANSA) - Rome, October 14 - Deflation in recession-hit Italy worsened in September, when the annual inflation rate was -0.2%, Istat said Tuesday. The rate was lower than the -0.1% the national statistics agency had forecast in its preliminary estimate. Prices fell 0.4% in September with respect to August, Istat added. Deflation hit the Italian economy for the first time since September 1959 in August, when the annual inflation rate was -0.1%.
    Italy has slipped into its third recession since the start of the global economic crisis in 2008 and many experts say there is a danger deflation could gain a strong hold over the economy and make recovery more difficult.
    The fall in inflation in September was again led by a drop in energy prices as was the case in August, Istat said.
    After energy prices fell by 1.2% in August, the drop accelerated in September to a fall of 2.8%.
    That also contributed to a reduction in food prices because of lower transportation costs for fresh items.
   

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