Italian Companies Pessimistic about Economic Outlook, Bank of Italy Survey Shows
Darkening Economic Prospects
Italian companies are growing increasingly concerned about the future of the country’s economy, according to the Bank of Italy’s quarterly survey. This pessimism is attributed to the political and economic uncertainty, as well as rising energy prices. In fact, 37% of the surveyed businesses expect worse economic conditions in the coming quarter, a significant increase from the previous survey’s 23%. Only 4% anticipate improvement, while 41% believe there will be no change at all.
Continued Weakness
The Italian economy, the third largest in the eurozone, contracted by 0.4% in the second quarter compared to the previous three months. Most economists predict that this weakness will persist in the near term. Additionally, the Italian government recently revised its growth forecasts for this year and the next. These factors contribute to the overall gloomy outlook.
Inflation Expectations
The Bank of Italy’s survey also revealed expectations of a decrease in inflation. Businesses anticipate a fall to 4.7% in 12 months’ time, compared to the previous survey’s 5.8%. Over a two-year horizon, the expected inflation rate is 4.2%, down from 5%. This aligns with the recent increase in Italian EU-harmonized consumer price inflation, which reached 5.7% year on year in the previous month.
Consistent Reports of Decline
The Bank of Italy’s survey is consistent with other reports highlighting the decline in Italy’s economy. The manufacturing sector has experienced contraction for the sixth consecutive month, with output and new orders steadily decreasing. The service sector has also seen a slight decline for the second consecutive month.
In conclusion, Italian companies are facing a bleaker economic outlook due to political and economic uncertainty and rising energy prices. The country’s economy is experiencing weakness, and inflation expectations are decreasing. These concerns are echoed by reports of decline across various sectors.
