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

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
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.

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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