Italian consumer confidence slips.

On June 21, 2007, Italy's national statistics office, The Institute for Studies and Economic Analyses (ISAE), released the results of its monthly survey of consumer confidence showing that confidence had declined to 107.2 points in June 2007 from 109.4 in May 2007.

"The downturn was especially marked for the evaluation of the country's economic situation and of future saving opportunities," said ISAE. The general economic situation indicator dropped from 95.8 points in May 2007 to 89.3 points in June 2007. When questioned about opportunities to save over the short term, respondent answers lead to a drop in the short term savings indicator from minus 64 in May 2007 to minus 70 in June 2007.

In presenting consumer survey results about opinion on Italy's overall economic situation, ISAE said, "In June, all the opinions on the country's general situation were widely negative. In particular, the balance for the opinions on the current situation declined from -69 to -83, reaching the lowest level since June 2006, the one for expectations deteriorated, moving from -29 to -35, the minimum value since September 2005."

Italian consumers were apparently aware that the rate of inflation is increasing. Significantly, the percentage of respondents who thought prices were "markedly higher" rose from 16 percent in May 2007 to 19 percent in June 2007. The International Monetary Fund (IMF) estimates that Italy's rate of inflation will increase 2.1 percent in 2007, slightly less than in 2006 when the rate of inflation increased 2.2 percent. In 2008 the IMF forecasts an increase in the Italian rate of inflation 2.0 percent. Unemployment is expected to remain stubbornly high at 6.8 percent both in 2007 and 2008.