Italy’s economy to contract by 8.9 per cent

ROME: The Italian economy, brought to its knees by the coronavirus, will contract by 8.9% this year, national statistics bureau ISTAT said on Thursday, revising down a previous projection of -8.3% made in June.

In its twice-yearly economic outlook report, ISTAT also revised down its forecast for 2021 when it now sees gross domestic product rising by 4.0%, compared with its June estimate of 4.6%.

Italy, the first Western country to be batered by the coronavirus in the spring, has seen a strong resurgence of cases in the autumn and in recent weeks has been reporting more daily fatalities than any other European nation.

The health ministry registered 684 corona virusrelated death son Wednesday, down from 785 on Tuesday, and 20,709 new infections.

The government, which has put much of the industrial north under partial lockdown and limited business activity, is due to announce new restrictions on Thursday to cover the Christmas and New Year period.

“This year the GDP fall will be determined mainly by the drop in domestic demand net of inventories,” ISTAT said, projecting that household spending would fall 10.0% and investments would decline by 10.1%.

ISTAT’S 2020 GDP forecast is broadly in line with the government’s official estimate of -9.0%. Rome is more upbeat for next year, when it has pencilled in a rebound of 6.0%.

ISTAT forecast an average jobless rate of 9.4% this year, down from its June projection of 9.6%, as fewer people look for work due to the economic slump. It forecast a rise in the jobless rate to 11.0% for 2021.