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Daily Digit: Italy's economic limbo

Sunday, Mar 10, 2013 - 01:37

March 11 - Italy's economy contracted by 0.9 percent in the fourth quarter of last year, in line with a preliminary estimate, and gross domestic product was down a revised 2.8 percent year-on-year, data showed on Monday. Ciara Sutton reports

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0.9 percent is today's daily digit in Europe - it's the amount Italy's economy contracted by in the fourth quarter of last year. The economy was dragged down by chronically weak domestic demand, while exports posted only modest growth. Italy's been in recession for nearly two years and is not expected to show any growth until the second half of this year. Last week Fitch slashed its sovereign credit rating, due to rising debts and political instability following last month's inconclusive election. And GDP has now been revised down by 2.8 percent year-on- year - far below the forecasts of outgoing Prime Minister Mario Monti. But markets analyst at IG, Brenda Kelly says renewed fears for the euro zone aren't just about Italy. (SOUNDBITE) (English) MARKET ANALYST FROM IG, BRENDA KELLY, SAYING: "I think Germany will be the thing to watch because it looks like Angela Merkel may have some trouble holding on to her Chancellor seat come September. And you've got this anti-euro party emanating from Germany at the moment and I think around 49 percent of Germans saying Germany should leave the euro, so I think the problem lies with the main core economies at the moment and that could be something to watch rather than Italy in the coming months." Italy may be at a financial and political crossroads, but one vote expected to run smoothly is the appointment of a new pope. The world's attention has shifted to leaders of the Catholic church opening their secret ballot this week, and many expect a result by the weekend. Markets will be hoping that Rome's politicians will be able to resolve their situation as easily.

Daily Digit: Italy's economic limbo

Sunday, Mar 10, 2013 - 01:37

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