Major EU economy hit with surging energy costs

The price of imported energy in Italy rose in March by 72.5% on a yearly basis, the National Institute of Statistics (ISTAT) reported on Tuesday. Data showed that the increase in energy prices accelerated by 5.6% compared to February.

Italy, which relies heavily on Russia for its energy needs, has seen its growth outlook deteriorate sharply since the introduction of Western sanctions against Moscow.

The economy contracted by 0.2% in the first quarter from the previous three months. The government expects much lower growth this year amid rising inflation and supply bottlenecks.

Earlier this month, the country unveiled a hefty package of measures aimed at shielding firms and families from surging energy costs. It also includes measures aimed at overcoming Italy’s reliance on Russian gas by mid-2024 and extending the life of four coal fired power plants for up to two years and accelerating the roll-out of renewable power sources.

ISTAT data also showed that Italian exports to Russia decreased by 50.9% compared to March 2021.

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