Rome – The latest data from Italy’s national statistics institute, ISTAT, show a small but encouraging rise in both business and consumer confidence for August. The composite business morale index, which blends surveys from manufacturing, retail, construction and services, climbed to 96.9, up from 95.7 in July. Meanwhile, the consumer confidence index edged higher to 94.5 from 94.2.
What the numbers mean
Although the figures fell short of the Reuters poll median forecast of 95.0 for consumers and 90.0 for manufacturing, the upward trend marks the second consecutive month of improvement for households and the third month of progress for firms. Analysts see the modest gains as a sign that Italy’s economy is holding together amid external shocks.
Government outlook and recent performance
Prime Minister Giorgia Meloni’s administration revised its growth outlook in April, cutting the projected expansion to 0.6% for 2025 and 2026 because of soaring energy costs and instability in the Middle East. Nevertheless, first‑ and second‑quarter gross domestic product (GDP) numbers came in stronger than expected, suggesting that domestic demand and export activity are providing a buffer against the geopolitical turbulence.
The government still projects a 0.8% growth rate for 2028, which would extend a six‑year stretch of sub‑1% expansion. While such modest growth may disappoint those hoping for a rapid recovery, the recent confidence upticks indicate that businesses and consumers are not yet resigned to stagnation.
Sector‑by‑sector snapshot
- Manufacturing: The sub‑index rose to 89.9, just below the 90.0 forecast, reflecting steady output despite higher input costs.
- Retail and services: Both sectors contributed to the overall business morale increase, buoyed by modest consumer spending.
- Construction: Activity remains cautious, but the sector’s inclusion in the composite index helped lift the overall figure.
Economists caution that the confidence gains are fragile. Energy price volatility, ongoing tensions in the Middle East, and Italy’s structural challenges—such as high public debt and an aging population—continue to weigh on the outlook.
Looking ahead
ISTAT will release September’s data later this month, which will reveal whether the upward momentum can be sustained. For now, the modest improvements provide a glimmer of optimism for Italian families and entrepreneurs who have faced a difficult economic climate over the past two years.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
