The latest figures from Statec show that inflation increased slightly in July from 3.2% to 3.7%, while the consumer price index (CPI) dropped by half a percent.
The drop in the CPI is an annual phenomenon around this time of year, and is explained in large part by the summer sales which naturally impact final sales prices. Looking on a category basis, some of the biggest price decreases were seen in clothing and footwear, which saw prices fall by 11.5%.
The slight drop this year came despite significant cost increases in several consumer purchase categories, significantly including travel and domestic services prices. Travel prices saw an increase of 17.8%, with the figure for air travel coming in slightly higher yet at 18.3%. The upward tendency of travel costs at this time of year is generally associated with increased demand due to school holidays.
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Other categories that saw an increase in cost include the aforementioned domestic services (2.5%), hospitality (0.4%), and financial services (1.2%).
Looking to fuel prices, diesel saw a slight month-on-month increase of 1.3%, as did heating oil (2.1%), while the cost of petrol fell by 1.2%. Despite this slight increase compared to June, petroleum products as a whole remain 12.8% lower than in July of last year.
Food prices drop slightly - first time since September 2021
The increase in the cost of food across much of Europe has been both headline news and cause for concern among politicians over recent months. For the month of July 2023, Statec reported that prices dropped on average by 0.1% - the first fall in this category since September 2021 - as compared to June.
On a slightly more detailed level, the biggest drop in prices was seen for fresh fish (-4.7%), followed by fresh vegetables which saw a drop of -3.8%, fresh fruit at -2.4%, and olive oil at -2.3%.
However, some food categories continued to see a price increase, the largest of which was seen in the cost of potatoes which went up by 4.2%. Confectionary also saw a 1.8% increase in prices, as did chocolate which is 1.2% more expensive.
This however is only comparing to June, a month prior. Looking on an annual basis, food prices are 10.4% higher than they were in July of 2022.
