Italian Consumer Confidence Continues to Slide

Contrary to consensus estimates of improvement, consumer confidence in Italy continued to fall in June and is currently at its lowest point since November, 1996. The seasonally adjusted index was 104.9 (1980=100), 0.66% below May and 10.19% below June of 2002. The survey, conducted by the ISAE (Instituto de Studi e Analisi Economica), is the first of the monthly indicators of confidence issued by the countries of the Euro Zone.

Underlying data in the June survey reveal that only 17% of consumers expect improvement in the general economic situation and only 13% expect unemployment to fall over the next twelve months. Except for a small portion that are unsure, the others expect conditions to remain about the same or worsen. These conditions suggest that consumers may be restrained in their spending and dampen or even reduce overall economic growth.