Italy economy to shrink over 8pc this year

MILAN (AFP) – Italy’s economy is set to shrink 8.3 per cent this year as the coronavirus crisis takes its toll, according to a forecast yesterday by the National Institute of Statistics.

The eurozone’s third largest economy is expecting its worst recession since World War II after a nationwide lockdown was imposed for more than two months to try to bring the pandemic under control.

The institute (ISTAT) said it forecast a rebound of 4.6 per cent next year.

It was very difficult to quantify the impact of the “unprecedented shock” to the economy, ISTAT said, and its forecasts were subject to “a large decree of uncertainty compared to the past”.

Others fear the lockdown fallout will be even worse. The Bank of Italy has forecast a drop in GDP of between 9.2 per cent and 13.1 per cent, while the European Commission expects it to fall by 9.5 per cent.

The American investement bank Goldman Sachs is even gloomier, saying Italy’s economy will shrink 14 per cent.