Italy Unexpectedly Slips Into Recession
DAVID GREENE, HOST:
NPR's Business News begins in a recession. To be precise, Italy has unexpectedly slipped into recession, despite a forecast of slight growth in the GDP this year. This is the third time Italy has been in recession since 2008. Here's NPR's Sylvia Poggioli.
SYLVIA POGGIOLI, BYLINE: The latest figures issued by the National Statistics Agency put pressure on the Prime Minister Matteo Renzi to accelerate his ambitious labor and tax reforms to revive growth. Despite economic forecasts of a 0.2 percent increase in GDP, the economy surprisingly shrank by 0.2 percent in the April-June quarter. That came after a 0.1 percent drop from January to March. The definition for recession is contraction for two consecutive quarters. With youth unemployment at over 40 percent and the European Union's second-largest sovereign debt close to $3 trillion, Rome may have trouble kickstarting the economy without raising taxes, which are already among the highest in the EU. Italy has been stagnant for almost a decade, with GDP contracting by nine percent since the global financial crisis began in 2007. Some economists say a recent decline in Italian exports could be linked to rising tensions in the Middle East, and between Ukraine and Russia - traditional Italian export markets. With news of the Italian economic data, the Euro fell to a nine-month low against the dollar, raising questions about the recovery of the Eurozone as a whole. Sylvia Poggioli, NPR News, Rome.