Italian Executives Grow More Pessimistic About the Economy
(Bloomberg) -- Italian businesses grew more pessimistic about economic growth at the end of last year, the country’s central bank said.
Views of the general economic situation worsened markedly in all sectors, according to a survey conducted by the Rome-based Bank of Italy between Nov. 26 and Dec. 17 among Italian firms with 50 or more employees.
The survey signaled increased uncertainty “due to economic and political factors occurring during the survey,” the report released on Monday said. “Overall assessments of current demand also worsened, but to a lesser extent. Domestic and foreign demand short-term expectations became less favorable but remained positive overall.”
Separately, Bank of America Merrill Lynch Global Research cut its estimate for Italy’s 2019 annual economic growth to 0.2 percent from 0.6 percent. BofAML also said it expects data will show the economy contracted further in the final three months of 2018, after shrinking in the third quarter.
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In the final weeks of 2018, the Italian government clashed with the European Union over its fiscal targets that were eventually revised in a last-minute deal. The tense talks with the EU’s executive arm prompted a rise in the nation’s borrowing costs, which had a limited impact on the loan rates for families and businesses.
Italian industrial output fell more than expected in November, boosting concerns that the euro region’s third-biggest economy slipped into a recession in the fourth quarter after contracting in the previous three months. Similar disappointing numbers were released this month in Germany, France and Spain.
The Bank of Italy’s report also showed that “consumer price inflation expectations decreased slightly over all time horizons.” For the next 12 months, firms in industries “excluding construction expect their own prices to grow at a slower pace compared with the previous survey,” it said.
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