ROME (Reuters) – Italy’s economy may be set for a modest recovery in the next few months, two surveys suggested on Monday, giving the government some breathing space as it prepares a challenging 2020 budget in the autumn.
The euro zone’s third-largest economy has been broadly stagnant for the last five quarters, and gross domestic product was flat in the second quarter on both a quarter-on-quarter and a year-on-year basis, data showed last week.
Things may be about to improve, however, national statistics bureau ISTAT said on Monday, citing its leading indicator for July, while a separate survey of service sector activity showed a significant improvement in the same month.
Confidence improved last month among both firms and consumers, who are more upbeat about prospects for the economy and jobs, ISTAT said in its monthly economic bulletin.
Its composite leading indicator “has interrupted the downward trend (that was) in place since the end of last year, pointing to a scenario of a slight improvement in production levels,” the statistics bureau said.
Italy’s labour market has been picking up for several months, despite the stagnant economy.
The jobless rate fell to 9.7% in June, below expectations and the lowest reading since January 2012, while the employment rate increased to the highest on record, ISTAT said last week.