Italy's recession drags on but upturn looks near

English>>World

Editor's Pick

Italy's recession drags on but upturn looks near

By Denis Greenan (ANSA.IT) 16:35, November 18, 2013

Email|Print|Comments

twitter

facebook

Sina Microblog

Rome, November 14 - Italy's cruel recession dragged on in the third quarter of 2013 but the government voiced hope the economy would soon pick up and start creating much-needed jobs, especially for a 'lost generation' of young people.

Economy Minister Fabrizio Saccomanni stressed the latest gloomy news did not mean the 2014 budget would need to be changed.

Italy posted its ninth consecutive quarter of negative growth in the July-September period, when its gross domestic product (GDP) dropped 0.1% on the previous quarter, Istat said Thursday. The national statistics agency said Italy's GDP was 1.9% down in the third quarter with respect to the same period in 2012. The agency had already announced at a parliamentary hearing that Italy had not pulled out of its longest recession in over two decades in the July-September period, but it had not said how much GDP had fallen in the third quarter.

The fact that GDP only edged down by 0.1% will feed hopes that the recession will end in the fourth quarter and Italy can look forward to a full year of positive growth in 2014. "The recovery is within reach in 2014," Premier Enrico Letta said. "There are signs that we can reverse the trend.

"Even though it cannot be seen in the figures yet, I'm confident we can get going again". Italy has been in recession since the third quarter of 2011.

Saccomanni said there is no need to amend the government's 2014 budget bill despite the latest GDP drop.

He suggested that was old news, and that forecasts for the present quarter that ends December 31, including the month of October, will be "more positive" and the entire year's GDP average "will be in line with that put in the (budget)".

All that means the government does not need to make any changes to the budget bill now going through parliament, he said.

Letta has vowed to address Italy's record 12% unemployment rate.

He included growth-stoking moves in the budget, although they have been criticised as being too little and the government is now trying to boost them.

Letta has called youth unemployment - running at over 40% - a "national nightmare" and has admitted the country risks "losing an entire generation".

He will chair the third European Union jobs summit in Rome in April and is pushing to get the EU to take a stronger turn from austerity to stimulus policies.

Italy's term as duty head of the EU in the second half of next year will have unemployment as its priority, Letta says.