Italy's consumer spending weak till 2012

Italian consumer spending will not recover substantially until 2012, after a painful recession pushed consumption down to levels last seen a decade ago, the main Italian retailers' group said on Monday.

Italian consumption is expected to rise 1.6 per cent next year to patterns seen before 2007, after a more modest 0.4 per cent growth last year and 0.9 per cent rise expected this year, a study by the Confcommercio industry group showed.

Consumption fell 2.1 per cent in 2008-2009 as Italians – faced with lower incomes and a surge in layoffs – spent less on vacations, food and clothing, bringing overall spending to the levels seen in 1999.

"After a difficult 2010 for the economy and companies – a year that ended with, among other things, 25,000 fewer firms – 2011 risks being another year of convalescence," Carlo Sangalli, head of Confcommercio, said in a statement.

The euro zone's third largest economy is recovering from its worst post-war recession and unemployment remains high, especially among youth. The government expects gross domestic product (GDP) growth of no more than 1.2 per cent in 2010 and 1.3 per cent in 2011.