ROME, (Reuters) – Italy’s economy shrank 12.4% in the second quarter from the previous three months, preliminary data showed on Friday, due to dipping activity during the coronavirus pandemic, but the decline was less severe than many analysts had predicted.
FILE PHOTOS: People wearing protective masks are seen at a supermarket in Posillipo, near Naples, Italy, March 10, 2020. REUTERS / Ciro De Luca
The quarterly slump in gross domestic product (GDP) in the eurozone’s third-largest economy was “unprecedented”, the ISTAT national statistics bureau said.
On a year-on-year basis, second quarter GDP dropped 17.3%, ISTAT said.
Analysts surveyed by Reuters forecast a 15.0% quarter-on-quarter contraction and an 18.7% year-on-year decline.
All segments of the economy suffer, said ISTAT, without giving details.
ISTAT also revised its reading down for the first three months of 2020 to provide a quarterly decline of 5.4% and a 5.5% decline compared to the same period last year. These were previously given respectively 5.3% and 5.4%.
Italy has been one of the hardest hit countries in Europe by Covid-19, recording more than 35,000 deaths since its transmission was revealed at the end of February. Seeking to stop the spread, the government introduced rigid restrictions on trade and travel on March 9, forcing most businesses to close.
The locking has gradually subsided since May 4 and most of the economy is still sick.
Italy’s official estimate is for a full-year GDP contraction of 8% this year, although Economy Minister Roberto Gualtieri said this might need to be revised lower. The Italian bank expects 9.5% negative growth and the European Commission expects the economy to contract 11.2% – the sharpest decline in the 27-nation bloc.
Spain reported earlier on Friday that its GDP contracted 18.5% in the second quarter from the previous three-month period, while in France GDP fell 13.8% and in Germany it fell 10.1%.
The Italian government has announced measures worth 75 billion euros ($ 89.18 billion) to help companies and families overcome the crisis and said it would present an additional 25 billion euro stimulus package in early August.
Reporting by Crispian Balmer