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Italian Business Confidence Rises in June After Letta Measures

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.

To contact the reporters on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net; Chiara Vasarri in Rome at cvasarri@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net

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