Italy: Consumer confidence plunges to lowest level in more than two years
August 29, 2011
The index of consumer sentiment published by ISTAT plunged from 103.7 points in July to 100.3 points in August, which marks the lowest confidence level since March 2009. The result marked a third consecutive drop in the index and was sharper than expected by market analysts, which had consumer confidence moderating to 101.9 points. With the August dip, consumer confidence moved further below its long-term average of 113.0 points, which does not bode well for private consumption going forward. The August result implied that expectations regarding the general economic situation had deteriorated markedly (-19.0 points), as the debt crisis looms over the country's growth prospects. That said, the personal financial situation improved marginally (+1.0 points), despite the austerity measures recently announced by the government. However, households remain cautious regarding their personal finances as prospects for purchases of durable goods dropped markedly compared to the previous month (-29.0 points).
Author: Armando Ciccarelli, Head of Data Solutions