ZCZC
BCN-19
ITALY-ECONOMY-GROWTH
Italy economy contracts for first time since 2014
ROME, Dec 1, 2018 (BSS/AFP) – Italy’s economy shrank in the third quarter,
a first since 2014, official data showed Friday, upping the pressure on the
country’s populist government and its big spending budget.
Gross domestic product (GDP) contracted by 0.1 percent between July and
September compared to the previous quarter, the national institute of
statistics said, revising down a previous estimate of stagnant or 0 percent
growth.
Year-on-year, the Italian economy grew 0.7 in the third quarter,
statistics agency ISTAT said.
Unemployment in Italy was up 0.2 percent at 10.6 percent, well above the
eurozone average of 8.1 percent, ISTAT also said.
The agency forecast last week that the economy would grow 1.3 percent next
year, below the government’s estimate of 1.5 percent included in a big-
spending budget rejected by Brussels.
ISTAT said growth this year will come in at a slower 1.1 percent but added
that unemployment could improve slightly in both years.
Italy’s populist government has argued that after years of failed
austerity policies, it is time to stimulate the economy to offer Italians
some respite and hope for the future.
Rome has submitted to the European Union a 2019 budget based on a public
deficit of 2.4 percent of gross domestic product in 2019 — three times the
target of the government’s centre-left predecessor — and one of 2.1 percent
in 2020.
But Brussels says this will only increase Italy’s overall debt, with the
deficit hitting 2.9 percent of GDP in 2019 and 3.1 percent in 2020 —
breaching the EU’s 3.0 percent limit.
BSS/AFP/HR/1000