June 28 (Bloomberg) -- Italian business confidence rose this month after Prime Minister Enrico Letta’s Cabinet passed plans to boost employment and postponed the payment of the value-added tax planned for July.
The manufacturing-sentiment index rose to 90.2, the highest since March 2012, from a revised 88.7 in May, Rome-based national statistics institute Istat said today. Economists had predicted a reading of 88.9, according to the median of 13 estimates in a Bloomberg News survey. The index is based on a poll of about 4,000 businesses.
On June 26, Letta’s cabinet approved a series of measures to try to increase hiring of young people after the jobless rate reached a 36-year high in April. In an effort to spur consumer spending, Italy also decided to postpone a scheduled sales-tax increase until Oct. 1, with the possibility of delaying it further. The euro region’s third-biggest economy is probably in its eighth quarter of economic contraction and is forecast to shrink 1.9 percent this year, business lobby Confindustria said in a report yesterday.
Consumer confidence increased in June amid households’ hopes of an economic recovery later in 2013, Istat said earlier this week. Still, industrial output unexpectedly fell for a third month in April, signaling that the recession Italy entered at the end of 2011 may extend to the second half of this year.
Istat originally reported a business confidence index at 88.5 in May.