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Italian household confidence fell this month to a record low as joblessness rose and Prime Minister Mario Monti’s fiscal measures deepened the country’s fourth economic recession since 2001.
The confidence index fell to 85.3, the lowest since the data series began in 1996, from 86.5 in May, national statistics office Istat said in Rome today. Economists forecast a reading of 86, according to the median of 15 estimates in a Bloomberg News survey.
Italy’s new property tax, known as IMU, made its debut this month with the first of three payments due on June 18. The IMU, which marked the return of taxation on primary residences after four years, was part of the 20 billion-euro ($25.1 billion) package that the government passed to cut the country’s deficit. That plan and other measures that have pushed gasoline prices to record levels helped push the economy deeper into the recession. Italy’s joblessness rose in April to a seasonally adjusted 10.1 percent, the highest in 12 years.
Monti’s government is trying to avoid a planned increase of the value-added tax that may weigh further on consumers, Economic Development Minister Corrado Passera said yesterday in an interview.
“The economy shows signs of strong deterioration,” Finance Undersecretary Gianfranco Polillo told the Senate in Rome on June 6. “In light of the fall in domestic demand, betting on a further VAT increase would be incomprehensible and even wrong.”
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