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Italian Retail Sales Fall Further

James Boston
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Italian Retail Sales Fall Further

Italian Retail Sales have once again contracted, albeit at a slower pace, according to the latest data release by the country’s National Institute of Statistics. On a year on year basis the retail July figure is now shown a fall of -1.4% compared to the -1.5% drop recorded to the end of June, there was an anticipation that the rate would moderately improve to -0.7%. Month on month the fall in sales has come in at -0.1% this matches the revised June over May reading but falls short of the forecast 0.2% growth expected by the market.

Italy, which is beginning another attempt to push through reforms to it’s labour market, has also just released an update on the Wage Inflation situation in the country. It has been announced that the Hourly Wage Rate has increase by 1.1% to the end of August when compared with the same month last year, this reading was largely anticipated by the market. The month on month wage inflation number also remains unchanged at 0.0%. Wage inflation in it’s own right is not the primary cause of Italy’s problematic labour market. The metric does not capture the true structural deformities that are hampering economic reform in the Eurozone’s third largest economy. The battle that Prime Minister, Matteo Renzi, is about to embark on involves slashing the numbers employed by the country’s bloated public sector and stripping both public and private sector workers of many of the multitude of additional benefits they receive.

Renzi has the backing of European Union (EU) as he embarks on this challenging reform program, the International Monetary Fund (IMF) have also stressed not just the need but also the urgency for labour market reforms in the Italian economy. Since taking office Renzi’s administration has repeatedly been met by domestic resistance to reform, the latest package, entitled 1,000 day’s to reform, represents a significant moderation of the reform timeline which will further hamper Italy’s path to recovery.

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