Italian Economy Shrinks 0.2% as Recession Enters Second Year

“Italy’s economy shrank less than economists forecast in the quarter through September as the country’s fourth recession since 2001 entered its second year.

Gross domestic product declined 0.2 percent from the second quarter, when it decreased a revised 0.7 percent, the National Statistics Institute Istat said in a preliminary report today. The decline was less than the 0.5 percent median forecast in a Bloomberg News survey of 21 economists. It was the fifth quarter of contraction. From a year earlier, output shrank 2.4 percent.

With export gains failing to offset the effect of weak domestic demand, the euro region’s third-biggest economy will contract 2.3 percent this year and won’t start recovering until the second half of 2013, Istat said Nov. 5. Industrial output will keep declining in the final three months of this year, employers lobby Confindustria forecast Oct. 30.

The Italian contraction contrasted with signs of recovery in Germany and France, the euro-region’s two biggest economies. German GDP climbed 0.2 percent in the third quarter, more than the 0.1 percent forecast, and France’s economy unexpectedly expanded by 0.2 percent, separate reports showed today.”

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