Italy Inflation Goes Negative in 2016

Italy has been bedeviled by a banking crisis that has seen the world's oldest bank grapple with a major liquidity problem.

This is from CNBC (Dec. 23, 2016):

Italy's government approved a state bailout for Monte dei Paschi di Siena on Friday, after the world's oldest bank failed to secure backing from private investors.

Prime Minister Paolo Gentiloni and his cabinet paved the way for a 20 billion euro ($20.8 billion) rescue fund to help the country's embattled banking sector, with BMPS, Italy's third largest bank, the priority.

Also, 2016 marked the first time in 57 years that the eurozone's third largest economy has experienced deflation.

Read this short article from (Jan. 4, 2017):

Italian consumer prices fell in 2016, the first year of deflation since 1959, official data published on Jan. 4 showed.

Prices slipped by 0.1 percent last year from 2015, according to provisional figures from the national statistics institute Istat.

Italian consumer prices already showed their weakest increase in decades in 2015, rising by just 0.1 percent.

Although inflation went negative in 2016, there was a pickup in prices towards the end of the year. In November they rose by 0.1 percent year-on-year and in December by 0.5 percent, surprising analysts who had been expecting 0.3 percent.

In November, Istat said it expected zero inflation in 2016 and 1.0 percent in 2017.

Analysts at Intesa Sanpaolo said, however, that they do not expect price rises to exceed 0.8 percent this year.

The link to the article is below: