ROME (Reuters) - Italian consumer morale fell to its lowest in more than three years in October as a worsening euro zone debt crisis depressed prospects for the economy, data showed on Tuesday.
National statistics bureau ISTAT’s headline consumer confidence index fell for the fifth month running to 92.9 in October from 94.2 in September, hitting its lowest level since July 2008, when the global economic crisis was intensifying.
Sentiment deteriorated especially regarding the near-term outlook for the economy, the situation of families and future opportunities to put aside savings, ISTAT said. Views on the outlook for the labour market also deteriorated.
Italy is under intense pressure from its European partners to push through long-delayed reforms to boost economic growth, help shore ups its finances and regain the confidence of financial markets, as the region’s leaders try to agree a solution to tackle the debt crisis.
Raj Badiani at IHS Global Insight said October’s confidence reading pointed to more cautious Italian consumer spending in 2011 and 2012.
“Household demand conditions are expected to remain fragile in Italy, not helped by the government being forced to accelerate the pace of fiscal tightening to keep the sovereign debt crisis at bay,” Badiani said in a note, noting that a planned hike in value-added tax (VAT) would add to the gloom.
The gloomy consumer report chimed with a separate survey commissioned by the association of Italian banking foundations Acri, which found that sentiment among Italians over the economic situation has deteriorated to its worst since 2001.
“Even the most positive people have doubts over the recovery, not just in the short term,” Acri said in a joint report with pollsters Ipsos, adding that a wait-and-see attitude in last year’s survey had been replaced by “gritty realism”.
“The year that is ending is a year of discouragement and concern for most Italians: the worst since 2001,” they said.
ISTAT’s consumer confidence survey showed the sub-index measuring sentiment on the economy fell to 75.6 from 78.3 while sentiment on respondents’ personal finances slipped to 98.6 from 100.6.
The sub-index on the future outlook dropped to 81.8 from 85.5 while the index on the current situation eased slightly to 101.0 from 101.2.
Morale fell in the centre and the south while confidence rose in parts of the richer north of the country, ISTAT’s survey found.
The statistics office said it had revised the data series after changing the base year to 2005 and adjusting its methods for calculating seasonal adjustments.
Italy, the euro zone’s third-largest economy, is now firmly at the centre of the bloc’s debt crisis, as alarm has grown about its stagnant economy and the sustainability of its 1.8 trillion euro debt pile.
A Reuters poll this month forecast economic growth of just 0.6 percent this year and 0.1 percent in 2012, leaving Italy in its customary position over the last decade as one of the world’s most sluggish economies.
Consumer spending has long been an achilles heel in Italy. Analysts say ISTAT’s consumer confidence index shows little immediate correlation with spending patterns, though it does reflect longer-term trends.
Retail sales in August, the most recent data available, were unchanged on the month and down 0.3 percent year-on-year, ISTAT said on Tuesday.
Silvio Berlusconi’s centre-right government pushed a 60 billion euro austerity plan through parliament last month containing a range of tax hikes and spending cuts, pledging to balance its budget by 2013.
The government has come under renewed pressure from its European partners this week to present firm plans for growth and debt reduction, including raising the retirement age.