Figures from the National Institute of Statistics (ISTAT) showed that in December the consumer confidence index rose to 106.7 points from 103.6 points in November. Economists had expected an increase to only 103.8 points. A sharp improvement offering some hope for a pick-up in economic activity despite elevated borrowing costs from the ECB. Meanwhile, the future expectations climate rose from 109.3 to 113.5, the current one progressed from 99.8 to 102.2, and finally, the personal one increased from 101.2 to 102.8.
The data also showed that the economic sentiment indicator rose to 107.2 points from 103.5 points in November. The confidence climate in manufacturing fell to 95.4 from 96.6, marking the lowest reading in over three years amid weakened demand from ECB's monetary tightening. The confidence climate in construction rose to 162.9 from 161.3. The market services confidence index improved to 106.4 from 96.7, and the retail trade confidence index rose from 107.5 to 107.8.
Last week, the Bank of Italy cut its 2024 GDP growth forecast to 0.6% from 0.8%, citing signs of more prolonged cyclical weakness. Meanwhile, the forecast for the current year was confirmed at +0.7%. As for 2025, the Bank of Italy now expects the economy to expand by 1.1% (+0.1% compared to the previous forecast presented in October). Italy's government is forecasting growth of 0.8 for 2023, 1.2% next year and 1.4% in 2025.