Italy’s economy probably shrank in the third quarter and will keep contracting until mid-2023, according to Treasury forecasts that will make grim reading for Giorgia Meloni, the rightist leader expected to be named prime minister this month.
The forecasts indicate the eurozone’s third-largest economy, hit by soaring energy costs and record high inflation, is already in the early stages of a recession, widely defined as two consecutive quarters of declining gross domestic product.
Growth was firmer than expected in the first half of the year and gross domestic product (GDP) jumped 1.1% in the second quarter from the previous three months, but the Treasury’s Economic and Financial Document (DEF) published on Friday said a downturn has already begun.
The slump is already emerging in monthly data. Some 74,000 jobs were lost in August, the second consecutive decline, according to the statistics bureau ISTAT, which also recorded a sharp drop in consumer and business moral in September.
On Monday, Italy’s closely-watched S&P Global Purchasing Managers’ Index (PMI) showed the manufacturing sector contracted for a third straight month in September, albeit by somewhat less than expected.
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