The Mortgage Bankers Association said Wednesday that mortgage applications dropped 13.5% in the week ended Sept. 6 from the previous week. The data, which include an adjustment for the Labor Day holiday, reflect a 20% drop in refinancing and a 3% decline in purchase loans.
Output fell 1.1 percent from June, when it rose a revised 0.2 percent, national statistics office Istat said in Rome today. Economists had estimated a 0.3 percent rise in July, according to the median of 16 estimates in a Bloomberg News survey. Output fell 4.3 percent from a year earlier when adjusted for working days.
The Italian economy contracted in the second quarter 0.3 percent, more than the 0.2 percent initially estimated, Istat said earlier this week. On Sept. 10 the institute said that exports failed to offset falling domestic demand in the period as joblessness remained close to 12.2 percent, the highest level since unemployment records began in 1977.
Today’s report contrasts with the optimism expressed in recent forecasts. Gross domestic product is estimated to be little changed in the three months through September and rise by 0.3 percent in the fourth quarter, employers lobby Confindustria said yesterday in a report. The Rome-based lobby said it now expects the economy to decline 1.6 percent this year and expand 0.7 percent in 2014. In June, Confindustria estimated GDP to contract 1.9 percent in 2013 and rise 0.5 percent next year.
Industrial production shows a close correlation with gross domestic product in Italy.
In the three months to July, output was down 0.5 percent from the previous three months.
National statistics institute ISTAT slightly revised down June’s output data to show a 0.2 percent rise, originally reported at +0.3 percent.
On a work-day adjusted year-on-year basis, output in July was down 4.3 percent, compared to a 2.1 percent decline in June.
The government said it will miss its deficit targets this year and next due to a weaker-than-expected economic recovery.
(…) The government, which had already abandoned the goal of getting the deficit down to 3% of economic output in 2013, said Wednesday that it would come in at 4.1% in 2013 and 3.6% in 2014.
Economic growth will be only 0.1% this year and accelerate slowly to 0.9% in 2014, instead of 1.2% as the government had previously forecast, he said.
Mr. Moscovici, who made headlines over the summer by acknowledging that the French are fed up with taxes, said the time had come to focus more on spending cuts than on tax increases.
The government is targeting €15 billion of savings in the 2014 budget from such areas as ministry expenses and health-care spending. Earlier this year, the government said there would be around €6 billion of extra taxes in the 2014 budget, but that will now be closer to €3 billion, ministers said.
In a sign of how the government is trying to shift the fiscal burden away from companies, Mr. Moscovici said business taxes will be stable next year.
“Taxes have risen strongly in recent years,” he said. “It is necessary to trend towards stabilizing taxation, which is in turn necessary to stimulate various growth engines.”
Indonesia Raises Rate to Four-Year High as Rupiah Extends Slide Bank Indonesia raised its key interest rate for the fourth time since early June to support a weakening currency and cool inflation expectations.