Italy enters economic recession, PM expects recovery in second half

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The Italian economy fell into recession technically in the last quarter of 2018, official data have revealed, while Italian Prime Minister Giuseppe Conte said he believes a recovery will come in the second half of this year.

Italy's gross domestic product (GDP) declined in both the fourth and the third quarter of last year, by 0.2 percent and 0.1 percent respectively, the Italian National Institute of Statistics (ISTAT) reported Thursday.

The two consecutive quarters of negative growth officially marked a technical recession.

"This negative result leads to a further decrease in the trend rate of growth, which drops to 0.1 percent, from 0.6 percent in the previous quarter," ISTAT said in a report.

"Such estimate -- which is provisional -- results on the supply side from a sharp deterioration in the industrial sector, along with a negative contribution from agriculture, forestry, and fishing, and a stagnant trend in the tertiary sector," it explained.

From the demand side, ISTAT noted a decline in domestic consumption and an increase in exports.

Such an economic situation is believed not to be a surprise for Italy's new government. Speaking to business figures in Milan on Wednesday, Conte said "trend data are not favorable, yet the positive side is that they do not depend on us, but on external factors."

He mentioned the economic slowdown in Italy's major trading partners, adding that he believes the Italian economy will recover in the second half of 2019.

In support of his outlook, positive signals came from the employment data released on Thursday.

In a separate report, ISTAT said Italy's employment rate in December grew by 0.1 percentage point to 58.8 percent on a monthly basis, a record since April 2008, before financial crisis hit the eurozone's third largest economy.

December's jobless rate fell to 10.3 percent, recording a decline of 44,000 people from the previous month, but meanwhile a slight increase in the unemployment of young people, with a rate updated to 31.9 percent. 

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