Italy consumer morale recovers slightly in April

ROME - Italian consumer confidence recovered slightly in April but remained near four-year lows, as Italians took a marginally brighter view of the economy and future prospects, data showed on Thursday.

By (Reuters)

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Published: Thu 24 Apr 2008, 4:35 PM

Last updated: Sun 5 Apr 2015, 11:43 AM

Rapidly rising prices of basic items like pasta and bread, a surging euro and turmoil in the financial markets have kept Italian consumers glum, underscoring the challenges awaiting Silvio Berlusconi after his victory in last week's election.

Research institute ISAE's seasonally adjusted consumer confidence index rose to 99.8 in April from 99 in March, when consumer morale touched its lowest level since May 2004.

That was above the mid-point forecast of 99.5 in a Reuters survey of 21 analysts, where estimates spanned 97.5 to 100.2.

Analysts said promises of tax cuts in the election campaign may have cheered up consumers, but did not signal a broader upturn in gloomy sentiment on the economy.

"The underlying trend remains weak for consumers and for consumption in the coming months: we are at around lows since 2004," said Paolo Mameli of Intesa Sanpaolo.

"Inflationary pressures limiting their purchasing power are definitely having an impact on consumers."

The survey's economic climate sub-index rose to 79.2 from 78.3 in March, while the sub-index on the future climate climbed to 95.4 from 93.5.

The current conditions sub-index, incorporating sentiment on the economy and personal finances, edged up to 104.4 from 104.3, while the personal finances sub-index rose to 109.3 from 108.7.

"It's a technical rebound. I don't think it will be long-lived," said Susana Garcia of Deutsche Bank. "Everything -- high food prices, high inflation, high uncertainty, turbulence in the markets -- somehow consumers have all this ingrained in their brains and are wary of spending."

Weak private consumption has weighed on the euro zone's third largest economy in recent years and Italy has been among the region's most sluggish economies for more than a decade.

Italian economic growth is expected to all but grind to a halt this year, and employers' body Confindustria confirmed on Thursday its forecast for zero growth.

The ISAE survey was conducted between April 1-18, meaning it was mostly carried out before the election that secured media mogul Berlusconi a third term as prime minister.

The impact of the centre-right victory on consumer morale will only be seen in May's data, said an ISAE official.

Analysts say ISAE's consumer confidence index is of little value in indicating variations in short-term Italian consumer spending but does reflect longer-term trends.

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