Hamilton Crawford - Italy Slides Back Into Technical Recession

SHANGHAI, February 6, 2019 (Newswire.com) - After contracting by 0.1% in the third quarter of last year, Italy’s economy again contracted in the fourth quarter, this time by 0.2%. A recession is defined as two consecutive quarters of contraction.

Although the contraction was larger than expected, analysts at Hamilton Crawford say the recession was not a surprise after months of data indicated that Italy’s economy was struggling.

Italy’s manufacturing sector, which started last year on a strong note, revealed an ongoing contraction in the final months of 2018 with manufacturing businesses unable to secure sufficient new orders.

With business confidence currently standing at a six-year low, Hamilton Crawford analysts say there seems little chance that the current downward trend in the manufacturing sector will pick up in the short term.

The budget fiasco that saw Italy lock horns with the European Commission after it refused to revise its proposed budget for 2019, also had a decidedly negative impact on Italy’s economic growth. Italy only managed to avoid sanctions from the EU by reaching a last-minute compromise with the European Commission.

Hamilton Crawford analysts say one of the biggest potential risks to Italy’s economy is the country’s high level of debt which makes up a large portion of the euro zone’s 1.5 trillion euros debt pile.

Analysts at Hamilton Crawford say Italy’s economy as a whole grew slightly last year and is expected to expand moderately this year in spite of the current technical recession.

Source: Hamilton Crawford