Italy in economic recession again

05/12/05 - newratings.com

LONDON, May 12 (newratings.com) – Italy's economy plunged into recession for the second time in two years in 1Q05, a government report revealed on Thursday.

Italy's national statistics office, Istat, said in a preliminary report on Thursday that the nation's gross domestic product (GDP) contracted by 0.5% in 1Q05, marking the sharpest decline in six years. Previously, the Italian GDP contracted by 0.4% in 4Q04. An economy is considered to be in recession if it contracts for two consecutive quarters. The contraction in Italy's GDP in 1Q05 was significantly below the market expectations, which called for GDP growth of 0.3%, on average. The GDP contracted by 0.2% y/y in the quarter, the report added. Italy's economic growth has underperformed the 12-nation Eurozone in eight of the past nine years. According to the Istat report, the GDP data for 1Q05 reflects worsening performances in the industry and agriculture segments. Istat is scheduled to release its detailed GDP report for 1Q05 on June 10, 2005.