Italy falls into recession - for the third time in a decade

The worsening of the Italian economic outlook will pose question on developments in the year 2019 

The Italian statistical agency Istat reported in its preliminary assessment that the Country's GDP contracted between October and December 2018 by 0.2%, compared to the previous quarter. Previous analyses forecasted a contraction of 0.1%.

Italy is officially in a technical recession, defined as at least two consecutive quarters of contraction. In the third quarter of 2018 in fact the GDP dropped by 0.1%.

After 2008-2009 and 2011-2013, it is the third time in the past ten years that the country slips into recession.

Spain grew by 0.7% in the last quarter, on a steady pace for the past two years, and even France, although affected by the gilet jaunes protests, grew by 0.3%. Italy appears to be the only contracting economy among the big EU Countries.

The Italian government and the European Commission agreed on a budgetary plan in December that assumes a GDP growth of 1% in the current year (down from the 1.5% that the Italian government initially declared in October).

An economic slowdown could require the revision of the agreed budget plan.