Sentiment among Italian businesses worsened in the third quarter, the Bank of Italy’s latest survey revealed Monday.
Declining confidence among businesses is due to expectations of high inflation, which has damaged the country’s economic outlook in recent months and is set to continue well into the future, the survey said.
The central bank surveyed Italian companies in the industrial and service sectors with at least 50 employees, between Aug. 25 and Sept. 15. According to the data, the overall economic situation worsened in the third quarter, and there was “pessimism” about the outlook for companies over the last three months of the year.
This reflected “uncertainty attributable to economic and political factors and the upward trend in commodity prices,” meaning surging energy prices due to the Ukrainian conflict.
Naples Italy ���� The People hit the streets over Energy Price Gouging and Soaring Inflation �� “Today the campaign is born, we don’t pay, from Naples to Genoa, from Milan to Palermo, nobody in Italy has to pay the bills!”…..The World is on Fire, it’s happening Everywhere �� pic.twitter.com/4IScdgwbxO
— �������������������������� (@riseupandresist) September 21, 2022
A third of the companies surveyed said difficulties related to rising energy costs had worsened in the previous three months, sparking a downward revision in their investment plans for the remainder of the year.
Meanwhile, companies’ expectations for consumer inflation also worsened, the Bank of Italy said. Italy’s National Institute of Statistics reported last week that inflation in September had reached a record 8.9 percent.
Although that level is expected to drop, the Bank of Italy said businesses expected the overall inflation rate to remain above 6 percent for the next year, and around 5 percent for at least two years.