Oct. 25 (Bloomberg) -- Italian consumer confidence unexpectedly fell to the lowest in more than three years in October as austerity measures and Europe’s debt crisis sparked concern that the economy may slip into a recession.
The sentiment index dropped to 92.9, the lowest since July 2008, from a revised 94.2 in September, national statistics office Istat said in Rome today. Economists had predicted a reading of 97.6, according to the median of 12 forecasts in a Bloomberg News survey.
Prime Minister Silvio Berlusconi’s government has pushed through two packages of deficit cuts since July totaling about 100 billion euros ($139 billion) to stem borrowing costs that have surged to record highs amid investor concern that Italy may succumb to the debt crisis. The measures may weigh on growth and the European Commission urged Italy yesterday to pass measures to spur the economy.
Italian retail sales were unchanged in August from the previous month and fell 0.3 percent from a year earlier, Istat said today. The country’s economy expanded 0.3 percent in the second quarter from the three months through March, when it grew 0.1 percent.
Italy has been downgraded in the last month by the three main rating companies, starting with Standard & Poor’s on Sept. 19, on concern that the country may struggle to tame the euro region’s second-biggest debt amid chronically weak growth and potential political instability.
Istat had originally reported a confidence reading of 98.5 in September.
--With assistance from Giovanni Salzano in Rome. Editors: Jeffrey Donovan, Dan Liefgreen
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