Consumer confidence in Italy has fallen to an all-time low as government austerity plans start to take their toll on the day-to-day life of Italians.
The national statistics agency Istat said Monday that the consumer confidence index fell to 89.0 points, the lowest level since the institute began calculating the statistics in 1996. Last month the index was at 96.3 points.
The figure is the latest in a line of poor economic indicators for the Italian economy in recent days, which has seen bond yields rise to their highest levels in two months, while the blue chip index on the Italian Stock Exchange in Milan fell in four of five sessions before Monday's close and is now at its lowest level since September 2011. The market has now lost 40 percent of its value since a year ago.
At the same time, the economy is expected to shrink by 1.2 percent compared to 2011 this year, and the jobless level has reached 9.3 percent, an 11-year high. Also on Monday, Istat said the jobless rate is expected to rise gradually throughout the year before dropping in 2013.
But of all the figures, analysts said Monday's consumer confidence level is the most significant because it is subjective, a kind of insight into the way macroeconomic figures impact residents.
"That the Italian economy is weak and the recovery is fragile, that is not a surprise," said Pietro Acbano, a macroeconomics analyst with ABS Securities. "But it will be hard to have hope that the situation will improve if consumer confidence continues to fall."
Acbano said that when consumer confidence is on the decline, consumers are more likely to save any excess cash they have based on fears the situation could get worse before it gets better.
"Economic growth prospects are much better when consumers are buying things," he said.
Italians have also voiced their worries about the country's economy through a series of national protests that have attracted between 1 million to as many as 2.5 million people over the previous two weekends.
Trade unions have also scheduled strikes to protest the tax hikes, government spending cuts, and other austerity measures pushed through by the five-month-old technocrat government led by former European commissioner Mario Monti.
But despite all the troubling news, Monti's approval levels remain high by historical standards, usually between 40 percent and 50 percent in recent weeks, according to the polling company Opinioni, whose co-director Maria Rossi called the phenomenon the "Berlusconi effect" -- referring to Monti's predecessor Silvio Berlusconi.
Berlusconi's approval levels dipped as low as 20 percent before he stepped down last November.
"People are not happy, but the Berlusconi era is close enough that people remember it and are thankful it is over," Rossi said, in reference to a period marked by scandal, criminal investigations, and a series of embarrassing personal revelations.
For his part, Monti said on Saturday that the Italian economy remained week but that it had turned the corner as was on the mend.
"Italy will make it," Monti said, speaking at a furniture expo outside Milan. "There is a light at the end of the tunnel."
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