Italy’s economy to grow by 0.5 percent

April 22nd, 2010 - 9:47 am ICT by IANS  

Rome, April 22 (IANS/AKI) Italy’s economy is expected to grow 0.5 percent this year, down from the previous forecast of 0.7 percent, ratings agency Standard & Poor’s has said.
The predicted growth would pick up next year and climb to one percent but will be half the euro-zone average, the agency said Tuesday.

With 8.6 percent of workers unemployed in Italy at the end of 2009, the unemployment rate jumped 1.5 percent from the previous year. There were 2.15 million Italians out of work at the end of the year.

The global recession caused the economy to contract 5.1 percent, causing businesses to cut spending and announce layoffs, which in turn led to cuts in consumer spending.

“Any return to growth in 2010 will be modest,” the agency said.

The International Monetary Fund in its World Economic Outlook in January projected the Italian economy would grow one percent this year and 1.3 percent in 2011.

Even as Italy is struggling against the global recession, another sign of falling demand has affected its economy.

Industrial orders fell 0.4 percent in February, national statistics office ISTAT said Tuesday, adding that the fall defied economists’ expectations of a 1.5 percent rise compared to the previous month.

The fall came despite a 5.6 percent annual increase in unadjusted industrial new orders for February, ahead of forecasts for a 2.6 percent rise.

Orders from the domestic market were down 0.3 percent in February and those from the non-domestic market fell 0.5 percent.

Seasonally adjusted industrial turnover fell 2.6 percent on a monthly basis. The domestic market dropped 2.4 percent and the non-domestic market three percent.

The fall followed a 2.7 percent rise in January, the report said.



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