Whilst the financial world has been lost in worries about Greece and Spain, another of the Eurozone’s 17 nations could be drifting towards disaster.
According to Istat, the Rome-based national statistics institute, recovery in the fragile Italian economy isn’t likely to occur until the last half of 2013 and the jobless rate will continue to rise.
Back in May Istat forecast that the Italian economy would contract by 1.5 per cent in 2012 before returning to growth with a 0.5 per cent expansion in 2013.
In light of tempered foreign demand and declining household spending Istat has now negatively revised these estimates. Istat also said that the jobless rate will sneak up to 10.6 per cent this year before hitting 11.4 per cent in 2013.
An emailed reported detailed that the statistics institute is expecting to see Italian Gross Domestic Product shrinking by 2.3 per cent this year. It also feels that that contraction of 0.5 per cent will continue into next year. These new figures are more in line with last month’s International Monetary Fund estimates.
Istat also asserted that ‘spending will remain negative due to the persistent difficulties in the labour market’ resulting in household consumption plummeting by 3.2 per cent in 2012 and continuing to fall a further 0.7 per cent in 2013. Exports, predicted to increase by 1.3 per cent in 2012 and 2.4 per cent in 2013, will be ‘the only positive contribution of economic growth’.
Despite this, the statistics institute observed that the third-largest economy in the Eurozone (after Germany and France) will undergo an ‘easing of unfavourable pressures and a modest recovery in the second half’ of 2013 and the report certainly isn’t quite as gloomy as that compiled by Prime Minister Mario Monti’s government – Although Istat did state that should ‘global trade slow down and tensions on financial markets sharpen’ these present figures could be knocked further downwards.
As of 14:10 pm
The Pound to Euro exchange rate is currently trading at 1.2496
The Pound to US Dollar exchange rate is currently trading at 1.5975
The Pound to Australian Dollar exchange rate is currently trading at 1.5426
The Euro to US Dollar exchange rate is currently trading at 1.2785
The Euro to Pound exchange rate is currently trading at 0.8002
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