Italy’s Economy Expected to Slow More than EU Commission Estimates

“Italy’s economy will shrink this year more than the European Commission estimates as weak domestic demand and investment extend the country’s longest recession in more than two decades, the national statistics institute said.

Gross domestic product will decline 1.4 percent in 2013 before rising 0.7 percent next year, Rome-based Istat said in the institute’s annual report. Household consumption and corporate investments will both decline this year.

Istat’s GDP projections compare with forecasts by the European Commission for a 1.3 percent contraction this year and growth of 0.7 percent in 2014. The Organization for Economic Cooperation and Development said May 2 that the euro region’s third-biggest economy will shrink 1.5 percent this year and expand 0.5 percent next.

“In 2013 households will keep experiencing a further fall in available income with inevitably negative consequences on consumer spending,” today’s report said. “At the same time, a recovery in investment by companies appears unlikely because of the productive capacity utilization and of the persisting weakness of domestic demand.” …”

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