Italy’s Economy to Shrink 2% This Year, Tremonti Says
Finance Minister Giulio Tremonti abandoned his forecast that the Italian economy will expand in 2009 and now predicts it will have the worst contraction in more than 30 years, matching projections by the country’s central bank and the European Commission.
Italy’s $1.8 trillion economy will probably shrink 2 percent this year, which would be the deepest recession since 1975, Tremonti told reporters today in Brussels. The previous forecast was for an expansion of 0.5 percent.
“We acknowledged the forecasts by the commission and our predictions are likely to be in line with them when we update our Stability Program in the coming days,” Tremonti said.
Italy’s central bank said on Jan. 15 that “taking into account the measures of the government,” the economy will contract 2 percent this year. The European Commission yesterday forecast a similar contraction fast payday advance.
The Italian economy, the third-largest in the euro region, entered its fourth recession in seven years as the global financial crisis forced companies to scale back production and made it harder to borrow funds for investment. The government in Rome last week won a confidence vote called to ease the passage of a 5 billion-euro ($6 billion) stimulus package for poor families and small businesses and to boost banks’ capital.
Economic reports today showed that Italian industrial orders and sales in November suffered their steepest drop since at least 1991, when the national statistics office first published the data. Orders plummeted 26.2 percent from the year-earlier month, while sales dropped 13.9 percent.
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