Italy’s recession will be worse than previously expected, the country’s central bank said today as it cut its 2013 estimate for gross domestic product on weakness in the global economy and disappointing internal demand.
Italian GDP will probably contract 1 percent this year, the Bank of Italy said today in its economic bulletin. That compares with a July estimate from the central bank for a 0.2 percent reduction.
“In our country, internal demand still hasn’t reached an inflection point,” the Bank of Italy said. The lower GDP forecast was “due to the worsening of the international scenario and the continuation of the weakness in business activity in recent months.”
Italians are mired in their fourth recession since 2001 as they prepare to vote next month in parliamentary elections. The tax increases and budget cuts imposed by Prime Minister Mario Monti’s caretaker government have pushed joblessness to 11.1 percent, the highest in more than 13 years. Household confidence was near a record low last month.