Bloomberg News

Italian Household Confidence Falls Amid Concerns on Growth, Jobs

June 23, 2011

June 23 (Bloomberg) -- Italian consumer confidence declined in June as households turned pessimistic about the outlook for employment and economic growth.

The sentiment index fell to 105.8 from 106.5 last month, national statistics office Istat said in Rome today. Economists surveyed by Bloomberg News had predicted a decline to 105.3, according to the median of 9 forecasts.

Italy’s exports failed to offset weak domestic demand in the first quarter as the euro region’s third-biggest economy expanded 0.1 percent, compared with 0.8 percent for the euro zone. Moody’s Investors Service put the country’s credit ratings under review last week for a possible downgrade because of challenges to growth. In a similar move last month, Standard & Poor’s lowered Italy’s credit-rating outlook to negative from stable, citing the nation’s slowing recovery.

On June 17 the International Monetary Fund forecast Italy would expand 1 percent this year, down from 1.3 percent in 2010, lagging behind euro-aeco rea growth amid a weak recovery and poor competitiveness. Unemployment in the $2.3 trillion economy fell in April to 8.3 percent, close to the highest since monthly record began in 2004.

Intesa Sanpaolo SpA, Italy’s second-biggest bank, plans to close as many as 400 branches as part of a plan to cut costs, the lender’s unions said in a June 16 statement.

To revive consumer spending and growth the government led by Prime Minister Silvio Berlusconi plans to overhaul the country’s tax system and the premier said he will present a bill before Parliament recesses for the summer, including three tax brackets down from the current five, with a lower maximum rate.

--With assistance from Giovanni Salzano in Rome. Editors: Andrew Davis, Dan Liefgreen

To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net.

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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