Italy’s Companies See 2022 Inflation at 3.2%, Bank of Italy Says

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Italian companies expect prices to rise 3.2% in the next 12 months as energy price increases and supply chain snags put pressure on companies, the Bank of Italy said.

Expectations were revised upwards by companies of all sectors, according to a survey by the Italian central bank done between Nov. 23 and Dec. 15 on 1,547 firms. Businesses see inflation at 3% in two years and still at 2.8% in the next five years.

Italian inflation reached its quickest in more than a decade at 4.2% in December mainly driven by energy prices. While nearby Spain also experienced a spike, French and German prices stabilized, showing some parts of Europe may have already experienced peak inflation. 

The company expectations for 2022 inflation are higher than those of the Bank of Italy, which last month predicted inflation will hit 2.8% this year before slowing to 1.5% in 2023.

Price developments will determine how the European Central Bank decides to map out its exit from stimulus and eventually raise interest rates. For the time being, the ECB is sticking to its predictions of a slowdown in inflation in the region.

The Bank of Italy survey showed that companies expecting the biggest increases were in industry and construction, whereas services companies see a lesser boost to prices. 

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