Italian business confidence rose this month before the Italian election that produced a hung parliament and sent bond yields soaring.
The manufacturing-sentiment index rose to 88.5 in February from a revised 88.3 the previous month, Rome-based national statistics institute Istat said today. Economists had predicted a reading of 88.4, according to the median of 14 estimates in a Bloomberg News survey. The index is based on a poll of about 4,000 businesses and was carried out in the first half of February.
Italy’s vote on Feb. 24-25 saw the leading bloc headed by Democratic Party leader Pier Luigi Bersani failing to win a majority in both houses of Parliament, making it difficult to form a government able to deal with the slump in the euro region’s third-biggest economy. Italy will contract again this year and unemployment will continue to rise in 2014 to reach 12 percent, European Commission forecasts released on Feb. 2 show. Italy’s gross domestic product will fall 1 percent this year after a 2.2 percent decline in 2012, the Brussels-based commission said.
The confidence index rose as executives grew optimistic about the outlook for orders and production, today’s report showed.