Italian Recession Becomes Longest On Record

Silvio Berlusconi Italy CoolREUTERS/Remo CasilliFormer Italian Prime Minister Silvio Berlusconi.

Italy just released second quarter GDP figures, which showed that the country continued to contract last quarter.

GDP fell 0.2% in the second quarter after contracting 0.6% in Q1, beating consensus estimates for a 0.4% decline.

Year over year, GDP fell 2.0%, better than expectations for a 2.2% decline.

However, at eight quarters running, Italy’s recession is now the longest on record.

“Italy’s economy is no longer in freefall, but it continues to contract, dragged down by a collapse in domestic demand, a severe credit crunch and the adverse effects of a tax-driven fiscal consolidation programme,” says Nicholas Spiro, managing director of Spiro Sovereign Strategy. “The best that can be said about Italy’s moribund economy is that it is stabilising and showing signs of a recovery of sorts. A quarterly contraction of 0.2% in the second quarter of this year is significantly better than a decline of 0.9% in the last quarter of 2012.”

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