Consumer groups say inflation is double official rate

| Sun, 06/15/2008 - 03:45
consumer

National statistics bureau Istat on Friday confirmed that inflation in Italy last month hit a 12-year high, 3.6%, but consumer groups claim the year-on-year hike was double that.

Adusbef and Federconsumatori said the Istat report was ''disturbing as it was underestimated'' and that general price increases will cost the consumer this year an estimated 2,070 euros.

Fueling inflation in Italy last month were again the rising costs for food and fuels.

Pasta prices soared 20.7% over May 2007, with a 1.8% hike over April, while in one year bread prices leaped 13.3%, with a 0.7% rise over April.

According to Istat, prises rose steeply for both processed and fresh foods, 6.3% and 5% respectively.

Double-digit increases were also recorded for fuels in May with diesel fuel costing a whopping 26.3% more than a year before and 6.8% more than in April.

Unleaded gasoline prices were 11.1% higher for the year and 5.4% for the month.

According to Istat, prices for the goods and services which families buy the most were on average 5.4% higher.

Inflation has been climbing steadily for the past year, from a low of 1.5% in May 2007. It hit 3% in January, slipped back to 2.9% in February but then leapt to 3.3% in March and stayed there until May.

Because of the significant hike in the cost of living, Adusbef and Federconsumatori said it was ''essential that the government take action, even through tax cuts and easements, to restore buying power to families, especially those with fixed incomes, to the tune of at least 1,200 euros per family''.

The consumer groups also called for greater deregulation in order to use competition as a means to cool inflation.

According to another consumer group, Codacons, rising inflation has created a ''state of emergency'' in Italy with the risk of a major drain on family budgets.

In order to curb inflation, Codacons called on the government to give more authority to the so-called 'Mr. Prices', a post created to act as a price watchdog, and to create an ad hoc department for consumers, which could impose sanctions to discourage speculation.

Codacons also called for greater deregulation and having fresh food products display three prices: those charged by the producer, the wholesaler and the retailer.