Italy reports one of Europe’s worst economic slumps in 2020

Italy reports one of Europe's worst economic slumps in 2020
Coronavirus restrictions in the last quarter of 2020 hit businesses particularly hard. Photo: AFP
Italy has reported its biggest contraction in GDP since the end of World War II.

Italy's virus-stricken economy shrank by 8.9 percent last year, national statistics office Istat said on Tuesday.

The figure is a first estimate, subject to revision, which is slightly more optimistic than what had been forecast by the Bank of Italy and the
International Monetary Fund. 

Both had predicted a 9.2-percent annual fall in gross domestic product (GDP).

But it is still one of the worst in Europe, compared with a fall of 5.0 percent in Germany and 8.3 percent in France.

Spain's economy did worse, with a drop of 11 percent.

Things were particularly bad for Italy in the last quarter, when GDP shrank by 2.0 percent compared to the previous three months.

The economy was hit by a new round of restrictions introduced to combat the second wave of coronavirus later in the year, Istat noted.

 

More than 420,000 jobs were lost in Italy between February and December, including 101,000 just in the month of December.

The slump also aggravated a long-existing gender gap in the labour market.

In December alone, 99,000 women lost their employment, versus only 2,000 men, Istat figures showed.

READ ALSO: Italy plans 'housewife bonus' to get more women into work

Fewer than half of working-age Italian women are in employment, according to the Organisation for Economic Co-operation and Development, even though women make up more than half of all Italians getting a bachelor's degree or PhD.

Economists say women in Italy have been disproportionately hit by job losses as they more often have insecure positions in service industries, such as in tourism or catering, which have been particularly badly hit by the coronavirus pandemic.

While manufacturing is one sector that has held up well in Italy, the economy is heavily reliant on tourism.

Italy, the eurozone's third largest economy, was the first European country hit by the pandemic.

In March 2020, it was also the first country in Europe to go into a national lockdown, with devastating economic consequences.

The outlook for Italy's economy in 2021 is uncertain amid political turmoil and delays to the vaccination rollout.

The country remains without a government after talks over the weekend failed.

Photo: AFP

Jobs in Italy

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