Italian companies hit by high energy costs: Central bank

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Italian companies hit by high energy costs: Central bank
 

Rome: Sentiment among Italian businesses worsened in the third quarter, a latest survey by the country’s central bank revealed.

Declining confidence among businesses is due to expectations of high inflation, which has damaged the country’s economic outlook in recent months and is set to continue well into the future, Xinhua news agency quoted the Bank of Italy survey as saying on Monday.

The central bank surveyed Italian companies in the industrial and service sectors with at least 50 employees, between August 25 and September 15.

According to the data, the overall economic situation worsened in the third quarter, and there was “pessimism” about the outlook for companies over the last three months of the year.

This reflected “uncertainty attributable to economic and political factors and the upward trend in commodity prices”, meaning surging energy prices due to the ongoing war between Russia and Ukraine.

A third of the companies surveyed said difficulties related to rising energy costs had worsened in the previous three months, sparking a downward revision in their investment plans for the remainder of the year.

Meanwhile, companies’ expectations for consumer inflation also worsened, the Bank of Italy said.

Italy’s National Institute of Statistics reported last week that inflation in September had reached a record 8.9 per cent.

Although that level is expected to drop, the Bank of Italy said businesses expected the overall inflation rate to remain above 6 per cent for 2023, and around 5 per cent for at least two years.

 


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