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Italy returns to growth after two-year recession

AFP
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Italy returns to growth after two-year recession
Italy has returned to growth after a two-year recession. Photo: Kentee Gardin/Flickr

Italy returned to growth in the fourth quarter last year after its longest post-war recession, official data from the Istat agency showed on Tuesday.

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Gross domestic product expanded 0.1 percent during the last three months of the year compared to the previous quarter, the National Statistics Institute said, confirming preliminary figures issued in February.

On an annual basis, the eurozone's third biggest economy contracted by 0.9 percent.

The institute meanwhile also revised its data for the third quarter of 2013, saying that the economy in fact contracted 0.1 percent rather than
remaining flat.

This means that the country had recorded nine straight quarters of contraction before booking growth in the last three months of 2013.

The Italian economy contracted by 1.8 percent in 2013 overall.

James Howat, an analyst at Capital Economics, said however that Italy's recovery would not be strong enough to address the underlying problem of high public debt.

"Overall, we expect the Italian economy to broadly flat-line this year.

"While this is certainly an improvement on last year's 1.8 percent drop, the country will remain vulnerable to renewed market fears about the sustainability of its public debt," said Howat.

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