According to preliminary data from Istat, Italian inflation remained stable at 1.6% in September 2025, in line with ING's forecasts. The overall stability reflects a balance between rising prices for processed foods and energy goods and declining prices for fresh foods, leaving headline inflation unchanged. Meanwhile, the harmonised inflation measure, which accounts for seasonal factors such as end-of-summer sales, increased slightly to 1.8%.
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The core inflation measure, which excludes energy and fresh food, remained steady at 2.1% year-on-year. Within this, the gap between services inflation, which has been decelerating, and goods inflation, which is increasing, narrowed slightly to 1.9%, down from 2.1% in August.
ING analysts highlight that this inflation stability reflects broader economic conditions. The Italian economy remains largely stagnant, supported by a relatively strong euro and the EU's decision not to impose retaliatory tariffs against the US. These factors are expected to persist over the coming months, keeping inflation within a narrow sub-2% band through the fourth quarter. ING maintains its forecast for average 2025 inflation at 1.7%.
Other elements reinforcing the muted inflation outlook include stable energy prices and ample national gas storage, currently at 92% capacity, which reduces the risk of electricity price spikes. Furthermore, wage growth, a key driver of services inflation, has slowed to 2.8% in July, despite low unemployment. This cooling of wages limits upward pressure on household spending and inflation.
From a demand perspective, private consumption is unlikely to accelerate significantly in the near term, reducing the risk of excess-demand-driven inflation. Business surveys indicate prudent pricing intentions, suggesting firms are not planning substantial price increases in the coming months.
Geopolitical developments could influence inflation trends, particularly a resolution in the Israel-Gaza conflict, which would likely mitigate the risk of oil price surges. In the meantime, Italy's inflation trajectory appears well-anchored, supported by moderate price increases, stable energy costs, and subdued wage growth.
In conclusion, Italian inflation is expected to remain contained, moving in a narrow range below 2%, reflecting a combination of stagnant domestic demand, strong currency effects, and disciplined pricing behaviour. These conditions suggest limited upward pressure on consumer prices in the short term, confirming the forecasted average annual inflation of 1.7% for 2025.
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