Italy’s consumer morale falls to its lowest level in about 17 years. (File photo)
Newly-released figures show Italy’s consumer confidence has unexpectedly slipped in January to its lowest level in at least 17 years as the country’s recession continues to take its toll.
Italy’s National Institute for Statistics (Istat) said Monday that the country’s confidence index dropped to 84.6 from 85.7 percent in December, the worst slump since the series began in 1996.
Raj Badiani, an economist at IHS Global Insight said, “With confidence bouncing around record lows, cautious household spending will serve as a major obstacle to any recovery in economic activity during 2013-14.”
Italy has been in recession since the middle of 2011. Most analysts expect gross domestic product to slash around 1 percent in 2013, following a contraction of around 2 percent last year.
Istat further said average wage inflation in 2012 came in at 1.5 percent, the lowest since the start of the historic series in 1983.
According to the statistics institute, the negative gap between wages and consumer price inflation last year was the widest since 1995.
On January 18, the Bank of Italy also said the country’s economy is likely to contract by 1.0 percent this year, far worse than a previously expected downturn.
The eurozone’s third-largest economy also faced a 2.1-percent decline in its energy production and a 1.3-percent drop in investment goods output in November.
Over the past decade, Italy has been the slowest growing economy in the eurozone.
The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.
MKA/JR
