Italian HICP inflation printed at 0.0% yoy after its reading of 0.1% yoy in February. Eventhough the energy component rose from -8.4% yoy to -6.5% yoy, adding 19bp to the headline numbers, and food prices added a further 6bp, these effects were nullified by the deceleration in goods- and services prices.
The core component consequently fell from 0.9% yoy in February to 0.4 % yoy in March. For April, the energy component is expected to continue its rebound with also food- and goods prices contributing positively.
The services component should show another fall which should in turn keep the core under pressure and put a lid on the headline number.
"We expect Italian HICP inflation to average 0.5% in 2015 and 1.5% yoy in 2016. The core component should average 0.8% in 2015 and 1.1% in 2016", said Societe Generale in a report on Thursday.
