Italy retail sales decline in July, defying market expectations for a flat reading

Retail sales in Italy declined during the month of July, defying expectations for a flat reading, as shoppers held back spending, not contributing enough to help the country’s stalling economic recovery.

Italy’s retail sales in Italy edged back 0.3 percent in July compared to the previous month and were 0.2 percent lower than the same month in 2015, data released by the country’s statistics agency Istat showed Monday. While monthly data are volatile, economists had been expecting a flat July reading and a 0.3 percent year-on-year improvement.

However, sales in June had been positive, up 0.3 percent compared to May and 0.8 percent higher than in June 2015.

Meanwhile, the country’s Prime Minister Matteo Renzi has staked his political career o persuade voters to back his campaign in the country’s upcoming referendum on constitutional reform. Also, Italy’s cabinet is today expected to set a date for the vote, likely in late November or early December.