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Italian consumer spending to remain subdued, says BMI

Italy's household spending growth rates will remain s ubdued compared to eurozone peers amid high unemployment and a stark regional wealth divided, BMI research said in a report.

“We forecast consumer spending in real terms expand by 1.6% in 2017, up from a weak 0.7% in 2016 , but still fairly unimpressive by eurozone standards. We forecast an annual average growth rate of 0.99% in real terms over the next five years through to 2021.” BMI research said.

Nonetheless , given that inflationary pressures, although modest, will return from 2017 onwards , the real improvement will be marginal for Italian households.

“We forecast inflation to grow at 1.5% on average over the next five years, eroding some of the gains of household spending growth. In value terms, this will see total household spending rise from €1.04 trn to €1.15 trn between 2017 and 2021. With confidence low and relatively weak economic growth, this limits the upside for our spending forecasts over the coming years.” the analysts added.