Italy’s business and consumer sentiment decreased according to the latest survey of households and businesses published by the country’s National Institute of Statistics (ISTAT).

Confidence in Italy’s business climate registered a considerable fall this month from 108.9 points to 106.8 due to fears over inflation, elevated energy costs and geopolitical concerns, the institute stated.

There were declines in all areas of the business survey, including retail trade, manufacturing, construction and services. The findings reveal businesses’ willingness to increase staff numbers, invest in research and progress into new market segments.

However, in contrast, consumer sentiment was basically the same, falling from 106.7 to 106.5 points.

All indicators use a 100-point baseline from 2010, which is adjusted up or down following responses to the ISTAT survey close to the end of every month.

Furthermore, the data by ISTAT shows Italy’s inflation in July stayed over the eurozone average, predominantly due to high energy prices. Another key economic indicator, industrial turnover, fell by 0.6% in Q2 compared to the previous three months. Whereas the institute forecasts the country’s economy will grow by 1.2% in 2023.

In addition, according to findings from the National Association of Business Owners, Confcommercio, the country’s economy is enjoying a boost from the return of tourism. 

That said, the president of Confcommercio, Carlo Sangalli, last week, the overall economic outlook for Italy was still unclear.