Italian firms' views on the economy's prospects in the near-term soured in Q2, according to the central bank's quarterly survey published on Monday.

The findings revealed manufacturers were especially downbeat, whilst services were more optimistic.

According to the Bank of Italy, between April and June, the percentage of businesses in Italy that forecast improved economic conditions in the coming quarter declined to 12.6% from 14.9% in the prior survey, Reuters news agency reports.

Those who forecast the situation will worsen remained predominantly stable at 23.2%, while the remainder predicted no significant change.

Manufacturers cited political uncertainty, elevated oil prices and weaker demand, according to the central bank, although having less of an impact than last year.

Over the past few months, Italy's economy has shown contrasting signals, with the country's manufacturing sector struggling, yet with growth in services and employment as a result of a surge in tourist arrivals, the Reuters report goes on to add.

Last month, Italy's manufacturing contracted at the steepest rate since the pandemic lockdowns, whilst the services sector grew – although at a slower pace, according to HCOB Global's surveys of purchasing managers published last week.

According to this latest poll by the Bank of Italy, businesses forecast inflation will fall to 5.8% in a year's time. This compares to 6.4 % in the previous survey.

Whereas over two years, businesses forecast inflation to fall to 5%, a decline from 5.3%.

In June, Italian EU-harmonised consumer price inflation decelerated to 6.7% from 8.0% during the previous month.

The central bank's survey was carried out between 22nd May and 12th June among the country's industry and services companies with a minimum of 50 employees.