(RTTNews) - The Italian economy contracted in the third quarter mainly led by a fall in domestic demand and investment, and likely entered a recession triggered by the Eurozone's deepening debt crisis, the latest official figures revealed Wednesday.
The seasonally and calendar adjusted gross domestic product declined 0.2 percent sequentially in the third quarter, in line with economists' forecast.
It was the first contraction in economic activity since the fourth quarter of 2009. In the second quarter, the economy expanded 0.3 percent quarter-on-quarter.
"With a quarterly contraction already in the bag, the Italian economy has virtually already fallen again in recession," Paolo Pizzoli, an economist at ING Bank NV, said.
On a quarterly basis, consumer spending declined 0.3 percent and investment was down 0.9 percent. Imports decreased 1.1 percent compared to the second quarter, while exports rose 1.6 percent.
On an annual basis, GDP expanded 0.2 percent, weaker than the 0.4 percent growth expected. The second quarter growth rate was revised down to 0.7 percent from 0.8 percent reported earlier.
Domestic demand excluding inventories deducted 0.4 percentage points from overall output. The change in stocks also contributed negatively to GDP. However, net exports added 0.8 percentage points to the GDP.
Negative cyclical trends are observed for the value added in agriculture and and industry, the statistical office said. The value added in services remained steady.
Italian lowmakers last week approved a package of austerity measures proposed by the country's new technocrat government headed by Prime Minister Mario Monti.
The measures were aimed at balancing Italy's budget by 2013.The EUR 33 billion ($43 billion) austerity package, containing spending cuts, tax hikes and pension reforms, was approved by the Chamber of Deputies, but is yet to be approved by the Senate.
The austerity package is also part of the Monti government's plans for overhauling the country's ailing economy, tackling the steadily declining market confidence that lifted the country's borrowing costs in recent weeks.
High public debt and deficit as well as the inability of the governments to support the banking system in the event of an economic shock led the major international credit rating agencies to review their ratings on most of the Eurozone nations.
Earlier this month, Standard & Poor's placed its long-term sovereign ratings on 15 Eurozone nations on CreditWatch with negative implications. Yesterday, Fitch placed the ratings of all investment grade rated Eurozone sovereigns, including Italy, under Rating Watch Negative.
rttnews.com
The seasonally and calendar adjusted gross domestic product declined 0.2 percent sequentially in the third quarter, in line with economists' forecast.
It was the first contraction in economic activity since the fourth quarter of 2009. In the second quarter, the economy expanded 0.3 percent quarter-on-quarter.
"With a quarterly contraction already in the bag, the Italian economy has virtually already fallen again in recession," Paolo Pizzoli, an economist at ING Bank NV, said.
On a quarterly basis, consumer spending declined 0.3 percent and investment was down 0.9 percent. Imports decreased 1.1 percent compared to the second quarter, while exports rose 1.6 percent.
On an annual basis, GDP expanded 0.2 percent, weaker than the 0.4 percent growth expected. The second quarter growth rate was revised down to 0.7 percent from 0.8 percent reported earlier.
Domestic demand excluding inventories deducted 0.4 percentage points from overall output. The change in stocks also contributed negatively to GDP. However, net exports added 0.8 percentage points to the GDP.
Negative cyclical trends are observed for the value added in agriculture and and industry, the statistical office said. The value added in services remained steady.
Italian lowmakers last week approved a package of austerity measures proposed by the country's new technocrat government headed by Prime Minister Mario Monti.
The measures were aimed at balancing Italy's budget by 2013.The EUR 33 billion ($43 billion) austerity package, containing spending cuts, tax hikes and pension reforms, was approved by the Chamber of Deputies, but is yet to be approved by the Senate.
The austerity package is also part of the Monti government's plans for overhauling the country's ailing economy, tackling the steadily declining market confidence that lifted the country's borrowing costs in recent weeks.
High public debt and deficit as well as the inability of the governments to support the banking system in the event of an economic shock led the major international credit rating agencies to review their ratings on most of the Eurozone nations.
Earlier this month, Standard & Poor's placed its long-term sovereign ratings on 15 Eurozone nations on CreditWatch with negative implications. Yesterday, Fitch placed the ratings of all investment grade rated Eurozone sovereigns, including Italy, under Rating Watch Negative.
rttnews.com
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