Italian economy shrank 12.8 per cent in Q2, more than first thought

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August 31, 2020 5:19 PM

The restrictions against travel between towns, then between regions, and the shutdown of many types of businesses, including clothing stores and restaurants, only started being eased in the last weeks of the second quarter.

The restrictions against travel between towns, then between regions, and the shutdown of many types of businesses, including clothing stores and restaurants, only started being eased in the last weeks of the second quarter. (Image: Reuters)

The Italian economy shrank by more than previously thought during the second quarter as a result of lockdown restrictions imposed to curb the coronavirus pandemic, official figures showed Monday. The national statistics bureau ISTAT said the economy contracted by quarterly rate of 12.8 per cent during the April to June period, with consumer spending largely behind the plunge. The Italian economy is also 17.7 per cent smaller than it was in the same period last year.

Those figures were worse than preliminary estimates issued in late July of a 12.4 per cent quarterly decline and a 17.3 per cent annual fall. Italy, which in March became the first European country to experience the full force of the pandemic, imposed one of the world’s strictest lockdowns.

The restrictions against travel between towns, then between regions, and the shutdown of many types of businesses, including clothing stores and restaurants, only started being eased in the last weeks of the second quarter. ISTAT said the severe downturn was a result of the economic effects of the health emergency and of the (government) adopted containment measures.

In addition to lower consumer spending, the agency said the Italian economy suffered from a sharp fall in exports, with all major areas of production taking a hit. Industrial production, it added, plunged by 20.2 per cent. Even though appliance and electronics stores were allowed to stay open during the lockdown, durable goods purchases dropped by 21.4 per cent.

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