Italy’s economy fares worse than expected

The Italian economy did worse than thought in the first quarter of this year, shrinking by 0.6 percent instead of by 0.5 percent estimated previously, official data showed on Monday.

Italy's economy fares worse than expected
Italy's economy performed worse than thought in the first quarter of 2013. Photo: Images of money/Flickr

The figures paint a grim picture for the state of the Italian economy, the third-biggest in the eurozone, marking the seventh quarterly contraction in a

However, the Organisation for Economic Cooperation and Development (OECD) said on Monday that its indices of leading indicators pointed to "positive change" in the Italian economy.

The first-quarter figure provided by the Italian statistics institute Istat was by comparison with output in the last quarter of last year. And on a 12-month comparison output slumped by 2.4 percent, also worse than an earlier estimate of minus 2.3 percent.

The last forecast by the Italian government for growth of the economy this year was issued before the arrival of the new government under Prime Minister
Enrico Letta at the end of April. That forecast was for the economy to shrink by 1.3 percent this year and then growing by 1.3 percent in 2014.

In the first quarter, all the drivers of demand fell: internal consumption fell by 0.3 percent, fixed investment by 3.3 percent and exports by 1.9 percent.

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Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.