Italy’s economy ‘among EU’s worst’ in Q4 2014

Italy's economy stagnated in the fourth quarter of 2014 thanks to sluggish domestic demand, going against the European trend in which most countries registered growth, figures released on Friday show.

Italy's economy 'among EU's worst' in Q4 2014
The figures mark the end of a disappointing year for the Italian economy. Euro photo: Shutterstock

Despite a brighter outlook for the coming year, Italy’s GDP was unchanged in the fourth quarter after contracting 0.1 percent in the third quarter, marking a 0.3 percent decrease on the same period in 2013, figures from the national statistics agency Istat show.

The figures mark the end of a disappointing year for the Italian economy, with GDP falling 0.4 percent in 2014.

The last time the Italian economy registered quarterly growth was in 2011, when GDP increased by 0.2 percent between Q1 and Q2, Istat said.

New European figures show Italy lagging far behind its neighbours, with GDP among the 28 EU countries growing by an average 0.4 percent between the last two quarters of 2014.

When compared to the same period the previous year, EU economies registered an impressive average growth of 1.3 percent.

Quarter-to-quarter the worst figures were in Cyprus, where GDP fell by 0.7 percent. Finnish GDP fell by 0.3 percent, while Greece saw a 0.2 percent dip.

The strongest GDP growth was Estonia’s 1.1 percent, followed by Hungary with 0.9 percent. The Spanish and German economies both grew by 0.7 percent in Q4, EU agency Eurostat said. 

But Italy is forecast to make a gradual recovery this year as exports grow and households have more spending power due to lower energy bills, a report earlier this month by the European Commission said.

The economy will grow by 0.6 percent this year – slightly better than previously forecast – and will rise to 1.3 percent in 2016, the EC said.

The stimulus programme announced by the European Central Bank in mid-January will also help spur growth.

When it comes to jobs, although Italy’s unemployment rate dipped slightly to 12.9 percent in December, more people entering the job market will keep the rate “at historically high levels” over the year, the EC said.

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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.