Italian retail sales declined for a 10th month in December as a bleaker economic outlook damped consumer demand during the busiest shopping period of the year, according to the latest reading on the Bloomberg purchasing managers index. The seasonally adjusted index of retail sales dropped to 44.7 from 45.3 in November, according to a survey of 440 executives compiled for Bloomberg LP by NTC Economics Ltd. The reading has been below 50, the level that signals a contraction in sales, since February.
>A 58 percent jump in oil prices this year is raising energy costs and leaving households with less money to spend on consumer goods. Italy's inflation rate jumped to a two-year high in November and consumer confidence fell to a four-month low in December on signs of an economic slowdown.
The Organization for Economic Cooperation and Development and Confindustria, Italy's biggest employers' lobby, cut their forecasts for 2008 growth in Italy in December. The OECD lowered its estimate to 1.3 percent and Confindustria said growth in Europe's fourth-biggest economy would slow to 1 percent from 1.8 percent this year, citing the rising cost of food and oil.
A three-day lorry drivers strike earlier in December caused temporary shortages of food, gasoline and medicine throughout the country, and some retailers polled by NTC reported a "negative impact" on sales.
The pace of Italian household spending, which constitutes two-thirds of the Italian economy, slowed across 2007, growing by just 0.2 percent in the third quarter compared with 0.6 percent in the second quarter, national statistics office Istat said Dec. 7.
About 35 percent of retailers surveyed said they missed their sales targets this month, with only 7 percent reporting they beat their expectations. ``The disappointing performance during the key Christmas trading period was largely due to surprising weakness in consumers' disposable income,'' NTC said.
Italy's debt-payment costs jumped in 2007 as rising interest rates forced the government to offer investors more to buy its bonds. The average yield on the government's more than 1.6 trillion euros ($2.4 trillion) of debt, the largest in the European Union, rose to 4.14 percent this year, from 3.34 percent in 2006, the Treasury said in a report from Rome today.
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Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Italy related comment. He also maintains a collection of constantly updated Italy economy charts together with short text updates on a Storify dedicated page Italy - Lost in Stagnation?