Italy business and consumer morale hit multi-year highs in July as COVID curbs dropped

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Morale amongst Italian businesses and consumers rose to multi-year highs in July, data showed on Wednesday, as the government continued to steadily ease coronavirus restrictions.

National statistics institute ISTAT’s reported that its manufacturing confidence index increased this month to 115.7 from 114.8 in June, posting its highest level since the current data series was introduced in March 2005.

The data was above a median forecast of 115.4 in a Reuters survey of 11 analysts.

ISTAT’s composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, came in at 116.3 in July, jumping from June’s reading of 112.8 and also registering the highest level on record.

Consumer confidence rose for a fourth month running to 116.6 from 115.1 in June, beating a median forecast of 115.5 in Reuters’ poll and posting the highest level since September 2018.

Almost 128,000 people have died of the coronavirus in Italy since its outbreak emerged in February last year, the second highest toll in Europe and the eighth highest in the world.

However, Mario Draghi’s government began progressively easing restrictions on business and movement in April, in response to a decline in infection rates and progress in vaccinations.

Almost all restriction have now been removed, even though infections have picked up over recent weeks.

The euro zone’s third largest economy contracted by 8.9% last year, its steepest post-war decline in gross domestic product.

Rome’s official forecast is for a rebound of 4.5% this year, but the government has recently said growth of around 5% now looks likely.

Photo: Two nuns enjoy an ice cream in downtown during a hot day, Rome, Italy. EPA-EFE/Giuseppe Lami