Italian Consumer Confidence Falls to Lowest in More Than a Year in August
Italian consumer confidence fell in August to the lowest in more than a year as government austerity measures made households more pessimistic about their finances.
The Isae Institute’s consumer sentiment index dropped to 104.1, the lowest since March 2009, from a revised 105.5 in July, the Isae research center said today in an e-mailed statement. Economists had forecast a reading of 105.3, according to the median of eight estimates in a Bloomberg News survey.
Confidence “about their personal situation showed the biggest decline, led by a plunge in people’s thinking about buying durable goods,” Rome-based Isae said.
The Italian parliament last month passed 25 billion euros ($31.6 billion) of spending cuts over the next two years to trim the deficit after Greece’s near-default led investors to dump bonds of high-debt countries such as Italy. European governments’ budget cuts in response to the debt crisis will weigh on growth and increase the risk of countries having their credit rating lowered, Moody’s Investors Service said this week.
Italy had Europe’s biggest debt at 115.8 percent of gross domestic product last year.
‘Persistent Concerns’
“The decline in consumer confidence is indicative of persistent concerns about the sustainability and the strength of the recovery,” said Silvio Peruzzo, an economist at Royal Bank of Scotland in London. Spending cuts “are certainly clouding the outlook, making consumers less upbeat.”
A sub-index measuring households’ expectations on the labor market improved, climbing to the highest since January, a sign that a growing number of consumers see employment rising in coming months, Isae said. The unemployment rate declined in June to 8.5 percent from 8.6 percent in May, marking the first fall in six months, national statistics institute Istat said July 30.
Italian households’ overall pessimism contrasted with the growing optimism in Europe’s biggest economy. German consumer sentiment will climb next month, the Nuremberg-based market research company GfK AG said today. German growth may not lose as much momentum as some economists forecast after expanding at a record pace of 2.2 percent in the second quarter, GfK said.
Italy, Europe’s fourth-biggest economy, expanded 0.4 percent in the second quarter from the previous three months and 1.1 percent from a year earlier.
To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net
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