- Report follows disappointing data on industrial sales
- Business lobby Confindustria pessimistic on economic growth
Italian business and consumer confidence unexpectedly declined this month, signaling growing pessimism among executives and households over the strength of the recovery in the euro region’s third-biggest economy.
The manufacturing-sentiment index declined to 102.1 from 102.7 in April, the Rome-based national statistics agency Istat said Friday. Consumer confidence fell to 112.7, the lowest since August, Istat also said. Economists predicted both indexes to rise, according to a Bloomberg survey.
The country’s main business lobby Confindustria expressed this week doubts about the strength of the economy that grew 0.3 percent in the first quarter. Italy is in a “modest, disappointing” re-start which won’t lead to pre-recession levels in the short term, Confindustria’s new president Vincenzo Boccia said, speaking at the lobby’s annual assembly in Rome on Thursday. Earlier in the week Istat reports showed disappointing data for both industrial sales and orders in March, with the former recording the biggest drop on annual basis since August 2013.
Italy’s gross domestic product is forecast to expand 1.1 percent this year, the International Monetary Fund said on Monday.
“Risks are tilted to the downside, including from financial market volatility, Brexit, the refugee surge, and headwinds from the slowdown in global trade,” the IMF report said. It will be “difficult” for Italy this year to reduce its debt-to-GDP level that rose to 132.7 percent in 2015 without further economic growth, IMF mission head Rishi Goyal said.