Italy's consumer confidence index in December dropped unexpectedly, as households’ assessment of their personal situation and the current economic climate deteriorated in the month, indicating that the slow recovery in Europe’s third-largest economy is yet to improve confidence among its consumers.

The headline index dropped to 96.2, its lowest level since June, from 98.2 (revised from 98.3) in November, national statistics institute Istat said on Monday.

The data indicated that consumers’ confidence in the overall economy improved slightly while the sub-index for measuring personal situation dropped from 101.1 to 97.3 in December, and the current economic climate sub-index declined to 95.0, from 99.2 recorded in the previous month. 

Italy's economy stopped contracting in the third quarter after a two-year recession, and the government expects the economy to start expanding at a modest pace of 1 percent in 2014.