Italy’s economy fell into recession at the end of 2018, capping a year of political turmoil and budget battles with Brussels.
The Italian economy contracted in the fourth quarter of last year, official data showed today, plunging it into a technical recession.
The 0.2 percent contraction – following a 0.1 percent fall in the third quarter – will put pressure on the populist government, which took power in June on the back of big-spending electoral promises.
Italy/s last recession was in 2014.
Prime Minister Giuseppe Conte had anticipated the bad news on Wednesday during a business conference in Milan.
“Analysts tell us we’ll likely still suffer a bit at the start of this year,” he said, pointing the finger at a slowdown in China and Germany which are hurting Italian exports.
“But all the elements are there to recover in the second half,” Conte added
The coalition government of the populist Five Star Movement (M5S) and the far-right League party was forced to water down its ambitious and costly budget in December to avoid being punished by the European Commission and the financial markets.
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A slowdown will make it even harder to follow through on expensive vote-winning measures both parties promised their bases, most notably a reform to the pension system and income support for the poor.
