Economy

Italy central bank revises recession outlook to worse 1.0%

Italy central bank revises recession
The Italian central bank says the country’s economy is likely to contract by 1.0 percent this year, far worse than a previously expected downturn.

The Bank of Italy said in its economic bulletin on Friday that the country’s gross domestic product will probably decrease 1 percent this year.

“In our country, internal demand still hasn’t reached an inflection point,” the bank said adding that the lower GDP forecast was “due to the worsening of the international scenario and the continuation of the weakness in business activity in recent months.”

Italy’s central bank had estimated a 0.2 percent reduction in the European country’s 2013 GDP.

Italy started to experience recession after its economy contracted by 0.2 percent in the third quarter and by 0.7 percent in the fourth quarter of 2011.

According to data, released by Italy’s National Institute for Statistics (ISTAT) on Monday, the country witnessed a 1.0 percent drop in its industrial output in November.

The fall follows a 1.1 percent drop in October, marking the country’s third steep consecutive monthly decline.

The eurozone’s third-largest economy also faced a 2.1-percent decline in its energy production and a 1.3-percent drop in investment goods output in November.

Italy also has the second-highest debt level in the eurozone. Greece holds the worst eurozone GDP debt level.

Europe plunged into financial crisis in early 2008. The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.

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