ROME, April 22 - Italian consumer confidence climbed for the third month running in April, with U.S. success in the Iraq war helping to ease shopper fears, research body ISAE said on Tuesday. ISAE's core index of confidence, which strips out seasonal and other erratic factors, edged up to 107.4 in April from an upwardly revised 107.3 in March. The March number had previously been reported as 107.1. "The favourable sentiment is above all on the general economic level, probably influenced by the rapid developments of the war in Iraq," said ISAE, which conducted its survey of 2,000 consumers between April 1 and 14.
U.S. forces swept into Baghdad on April 9. "As international tensions abate, Italian consumer confidence can continue to improve in the coming months, and make up the ground rapidly lost over the course of 2002." But private analysts were more sceptical. "Although the worst might seem to be over, uncertainties over Italy's economic fundamentals put a strain on any significant improvement in confidence," said Kleopatra Nikolaou of 4Cast in London. Last week the Italian government more than halved its 2003 growth forecast to 1.1 percent. It also warned that in a worst-case scenario the economy could expand as little as 0.6 percent. Italian industry, which has been dragging its heels for months, fell more than expected in February, with the country's key auto manufacturing sector sliding. And inflation, long stubbornly above the European Central Bank's two percent ceiling, is expected to stick at 2.7 percent in April. Nonetheless ISAE's April snapshot showed Italian shopper morale about the general economy rising to 91.2 from 88.5 in March, though the index was still lower than in February. Consumers seemed happy about the jobs market, with 44 percent of those surveyed expecting unemployment to stabilise, compared with 40 percent in March. And Italians were more upbeat about their personal finances too, with that component rising to 115.8 from 114.5 in March.//