Italian businesses less gloomy on economy: central bank survey

MILAN, Jan 16 (Reuters) – Italian businesses’ opinions about the economic situation and their business conditions were less negative in the fourth quarter of 2022 compared with the previous three months, the Bank of Italy said on Monday.

Italy is grappling with weak growth as sky-high energy prices batter its economy. Last month national statistics office ISTAT cut its forecast for 2023 gross domestic product expansion to 0.4% from a 1.9% projection made in June.

In the last three months of 2022, 47% of Italian businesses believed economic conditions were worse than in the previous quarter, the central bank said in its quarterly survey, down from 77.9% in the third quarter report.

Inflation expectations, however, continue to increase.

Firms’ expectations for consumer price inflation in 12 months time rose to 8.1%, compared with 6.9% in the previous survey. Over a two year horizon the expectation was for a 6.7% inflation rate, up from 5.7%.

Economic and political uncertainty, along with the energy crisis, continue to weighing on economic growth prospects, the Bank of Italy said.

In the last three months of last year, 41.6% of businesses – down from 54.9% – thought high energy prices had brought similar or greater difficulties than in the previous three months.

The survey was conducted between Nov, 22 and Dec. 14 among Italian industry and services businesses with at least 50 employees.