Prices in Italy soared to all-time highs last year, according to the government statistics agency ISTAT on Tuesday.

For 2022 as a whole, prices were 8.1% higher on average compared to the previous year, the highest level recorded in Italy since the Euro was introduced back in 1999. Last year, there was just a 1.9% year-on-year increase.

The price rise at the end of 2022 was more dramatic, with prices up 11.6% in December compared to the same month in 2021. During the two previous months, the year-on-year rise stood at 11.8%.

According to ISTAT, the principal factor fuelling the price surge was soaring energy costs as a result of the war in Ukraine.

The problem of rising energy costs has been particularly severe in Italy, despite impacting the European Union and beyond. Before the war broke out, the country was highly reliant on Russian natural gas imports.

In addition, Italy’s economy is also the second largest exporter, yet this has been greatly affected by elevated production and transport costs.

Last month, the inflation rate for the eurozone stood at 9.2% as per initial figures from Eurostat, a decline from November’s 10.1%.

According to the prominent business association in Italy, Confesercenti, mounting prices are affecting the country’s poorest people, with a larger percentage of their income going towards energy costs. The forecast inflation rate for lower-income households in Italy is 16%.

“The picture for 2023 remains uncertain, with a change in the inflation rate that will remain above 5%,” according to Confesercenti, forecasting that even if energy costs stabilise, they would be around 150% higher than in 2009.

Furthermore, ISTAT data shows energy prices were 63.3% more at the end of last year than the year before. Energy prices, on average, were 50.9% higher in 2022 as a whole than in 2021. Transport costs also rose by 6.0%.

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