Italy business morale slips in December but consumers more upbeat

[ROME] Morale among Italian businesses slipped in December as an increase in Covid-19 infections raised doubts about the strength of economic recovery, but consumer morale edged up slightly, data showed on Thursday (Dec 23).

National statistics institute ISTAT's manufacturing confidence index declined to 115.2 in December from 115.9 the month before, coming in broadly in line with a median forecast of 115.3 in a Reuters survey of 8 analysts.

ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, fell more steeply to 113.1 in December, compared with November's reading of 114.8.

However, consumer confidence unexpectedly edged up this month to 117.7 from 117.5 in November, beating a median forecast of 116.2 in Reuters' poll.

Consumer sentiment may have been buoyed by more than 7 billion euros (S$10.8 billion) of tax cuts set out government's 2022 budget currently before parliament.

Mario Draghi's government is due to announce measures later on Thursday to tighten coronavirus restrictions over the Christmas period, in response to a recent steady increase in infections, hospitalisations and deaths.

The eurozone's third largest economy contracted by 8.9 per cent last year, its steepest post-war decline in gross domestic product.

Rome officially forecasts a rebound of 6.0 per cent this year, but recent data has been positive, and Draghi said on Wednesday that growth will somewhat stronger.

REUTERS