Italian Business Confidence Drops to Lowest in Two Years

Italian Business Confidence Drops to Lowest in Two Years
26 April 2012, by Lorenzo Totaro and Chiara Vasarri (Bloomberg)
http://www.bloomberg.com/news/2012-04-26/italian-business-confidence-drops-to-lowest-in-xx-months.html

Excerpt:

Italian business confidence unexpectedly fell to the lowest level in more than two years in April amid concerns that the country’s fourth recession in a decade may deepen.

The manufacturing-sentiment index dropped to 89.5 from a revised 91.1 in March, Rome-based national statistics institute Istat said today.

Economists had predicted a reading of 92.1, according to the median of 11 estimates in a Bloomberg News survey.

“It is premature to say whether today’s decline in business sentiment might be a temporary blip or a signal of a more protracted phase of very weak economic activity,” Unicredit economists Chiara Corsa and Loredana Federico wrote in a note today.

“Still, taken at face value the April figure is consistent with a GDP contraction at the beginning of the second quarter.”

Prime Minister Mario Monti’s Cabinet, which is implementing a €20 billion ($26.4 billion) austerity plan to eliminate the deficit, lowered its forecasts for the euro-region’s third- biggest economy on April 18, saying it will contract 1.2% this year.

The Treasury also forecast that unemployment, at an 11-year high of 9.3%, won’t start declining until 2013.