Published November 26, 2012
ROME – Italian consumer confidence has hit a record low this month, battered by a bleak economic outlook and squeezed family finances, data showed on Monday.
The headline index from national statistics bureau ISTAT dropped to 84.8 in November, the lowest since the data series started in January 1996, from 86.2 in October.
The November figure was lower than any of the forecasts in a Reuters survey of 17 analysts whose forecasts had centered on a slight increase to 86.5. The October figure was revised down from 86.4.
The survey offers little hope that the recession that began half way through last year will end any time soon. In the third quarter the economy, the euro zone's third biggest, posted its fifth consecutive quarterly drop.
"Families do not foresee an improvement to their economic situation and this points to a bleak Christmas shopping season," said Paolo Mameli, an economist at Intesa Sanpaolo in Milan.
After growth declined a less-than-expected 0.2 percent in the third quarter, Intesa Sanpaolo forecasts steeper drops in the last three months of 2012 and during the first quarter of next year, -0.5 percent and -0.4 percent respectively.
Italy has been the European Union's most sluggish economy for more than a decade, and Prime Minister Mario Monti's tough austerity measures, taken to save the country from a Greek-style debt crisis last year, have weighed heavily on consumer morale.
The economy is under further pressure from political uncertainty. Italians are scheduled to vote in parliamentary elections in the spring, probably in March, but party alliances and even the leadership candidates are still largely unknown.
Pier Luigi Bersani, head of Italy's Democratic Party, will face his main rival Matteo Renzi in a runoff next week to pick the center-left candidate after the two scored the highest number of votes in a five-way primary on Sunday.
Monti has said he will not run in the next election because it would destabilize the right-left coalition that now supports him, though he has left open the possibility of staying on if there is no outright winner.
Silvio Berlusconi, whose resignation at the height of the financial crisis last year brought Monti to power, has changed his mind several times over whether or not to run, and has yet to clarify his intentions.
If he decides to found a new party to compete in the election, it will likely split the People of Liberty (PDL) party that he created with other center-right allies in 2008-09.
"There's a lot of uncertainty regarding the political situation," Mameli said, "and this is definitely weighing on investment decisions by both households and companies."
ISTAT's consumer confidence survey showed the sub-index measuring sentiment on respondents' future outlook dropped to 75.2 from 78.2, while their sentiment on household finances dropped to 90.9 from 91.0.
Analysts say ISTAT's consumer confidence index shows little immediate correlation with spending patterns, though it does reflect longer term trends.
(Additional reporting by Giulio Piovaccari in Milan; Editing by Ruth Pitchford)