Italy falls into triple-dip recession

6 Aug 14
Italy has fallen back into recession for the third time since 2007, its economy having contracted for two quarters in a row, according to statistics agency Istat.

Italy’s gross domestic product reduced by 0.2% over the three months to June following a 0.1% contraction over the three months to March, putting Italy in a triple-dip recession.

Azad Zangana, European economist at Schroders, the multinational asset management company, said the fall in GDP over the second quarter was a surprise as most commentators had expected growth of 0.1%.

‘The latest contraction puts the level of Italian GDP 9.1% below its previous pre-financial crisis peak in Q3 2007.’

Italy’s Prime Minister Matteo Renzi and his party have been slow to implement substantial macro-economic reforms and have instead been pre-occupied with politics, Zangana observed. ‘This latest news will come as a severe blow for [the PM].’

‘Meanwhile, neighbours Spain are putting Italy to shame, as early estimates there show growth of 0.7% in the second quarter,’ he added.

He pointed out that countries like Spain and Ireland have outperformed economic expectations by implementing structural reforms and improved their competitiveness, while Italy and France have been slow and unwilling to embrace reforms and continue to be a drag on the wider eurozone economy. 

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