Consumer confidence continued to
fall in Italy in August, concluding what some on Wednesday
called a "black summer" of frugality fed by fears of joblessness
and lower incomes amid recession.
The latest findings by national statistical agency Istat
showed the third consecutive month of decline in consumer
confidence, which slid to a measure of 101.9 from the previous
104.4.
That marked its lowest point since March, the agency added.
It also reflects a "black summer" endured by Italians who
are feeling deeply worried about their own financial conditions
as well as those of the country, said consumer group Codacons.
And autumn looks no better, as economic fears are pushing
individuals and business alike to hold on tightly to every euro,
the group said.
That "raises fears for a black autumn on the Italian
consumer side," said Carlo Rienzi, president of Codacons.
"If there is no trust (in the economy) citizens will tend
to postpone purchases...and reduce their consumption," he said.
Italy has been hit by its third recession since 2008 and is
struggling with high unemployment, especially among youth where
almost half of people aged 15 to 24 cannot find work.
The latest jobless figures showed a youth unemployment rate
of 43.7% in June and an overall rate of 12.3%.
Employment and job prospects are crucial to supporting
consumer confidence.
People who fear losing work and income avoid spending on
anything but essentials which, in turn, damages economic growth
and in the long run, job security.
The Italian government has been trying to short-circuit
that process, with measures such as an 80-euro monthly tax bonus
aimed at leaving more cash in the pockets of low-income
Italians, the group most likely to spend that bonus from
necessity.
Premier Matteo Renzi's government has also been promoting
reform of the labour system, and has pledged to cut red tape and
bureaucracy to make it easier for businesses to set up and
operate smoothly in Italy.
It is also pledging significant reforms to the justice
system, a priority in Friday's cabinet meeting, to attract
entrepreneurs who complain Italy's moribund justice system makes
it impossible to enforce business deals and contracts.
Economy Minister Pier Carlo Padoan says the government's
drive to improve efficiency across the public administration
means it is ready to reduce spending, streamline procedures, and
eventually lower labour taxes as it works to boost the economy.
In an interview published Wednesday in the Corriere della
Sera, Padoan described "growth-friendly fiscal consolidation"
but also acknowledged that Italy must lower its growth forecasts
for 2014.
"The current situation is worse than expected and no one is
happy about it," he told the newspaper.
Padoan did not give a new forecast to replace the Renzi
government's previous prediction of a 0.8% expansion in 2014.
That forecast was destroyed when Istat reported recently
that in the second quarter of this year, the economy actually
shed 0.2% and, following a 0.1% contraction in Q1, fell back
into recession.
Italy is not alone in the crisis, as recent reports show
the rest of the eurozone is also struggling with disinflation
and sluggish growth which, Padoan said, shows that the region
must work together to stimulate economic expansion.
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