Friday’s warning shot from S&P to Italy sent the Milan Stock Market plunging on Monday, and got everyone freaking out that this economic giant could find itself in the same mess as the rest of the PIIGS.
So how bad, really, the Italian economy?
Well, on the surface, it’s no Greece or Spain, but it’s pretty mediocre.
Some key headline statistics grabbed from Bloomberg:
- Q1 GDP: 1.0%.
- April CPI: 2.6%
- April PPI: 6.1%
- March unemployment: 8.3%
- Retail sales have been flat.
One big red flag: Government debt-to-GDP 119%, which is usually seen as a big danger era.
Meanwhile, just for comparison, here are some numbers from Spain:
- Q1 GDP: 0.8%
- April CPI 3.8%
- Unemployment: 21.3% (!)
- Retail sales March -7.9%
So Spain is clearly in way worse shape than Italy, and not helping is the fact that its banks are much weaker (it would seem).
So while Italy has its problems — government debt being a big one — it’s not (yet) in the recessionary basket case of some of its fellow PIIGS.
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