Morale among Italian businesses and consumers rose in June, data showed on Wednesday, after months of political stalemate ended with the formation of an anti-establishment coalition government.
National statistics institute ISTAT's manufacturing confidence index slipped to 106.9 in June from 107.6 in May, in line with the median forecast of analysts surveyed by Reuters.
However, ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, climbed to 105.4 from 104.6 thanks to improved sentiment among service providers and retailers.
Consumer confidence rebounded after a drop the month before, with the index rising from 113.9 to 116.2. That was far above the median forecast of 113.2 in a Reuters' survey.
Forming A Government
At the start of this month the 5-Star Movement joined forces with the right-wing League to form a coalition government promising to slash taxes, boost welfare spending and crack down on immigration.
The government's first month in office has seen a surge in support for the League on the back of a vigorous campaign to curb migrant arrivals.
Both parties are now polling at just under 30 percent, according to surveys, giving the government wide popular backing.
The economy has been growing modestly since Italy emerged from a steep, double-deep recession in 2014, but poverty has continued to increase and unemployment remains well above the euro zone average.
The former centre-left government forecast growth of 1.5 percent in 2018, in line with last year's rate which was the strongest since 2010.
However, most recent data has pointed to a slowdown and some economists and think-tanks now expect growth to be weaker.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
