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Bank of Italy sees Italian economy contracting 5% in first quarter

FILE PHOTO: Banca D'Italia (Bank of Italy) sign is seen in downtown Rome, Italy, October 19, 2018. REUTERS/Alessandro Bianchi

ROME (Reuters) - Italian gross domestic product will contract by around 5% in the first quarter of this year from the previous three months as the economy is hit by a lockdown to try to contain the coronavirus, the Bank of Italy said on Friday.

In its quarterly economic bulletin, the central bank said industrial output probably fell by around 15% in March from February, and estimated it would be down by 6% over the whole of the first quarter from the previous three months.

The bank did not provide GDP or industrial output forecasts for the whole of 2020.

With most businesses closed since March 9, economists say the euro zone’s third largest economy is already in deep recession, though forecasts vary widely as to the size of the GDP contraction expected this year.

Italian business lobby Confindustria has projected a fall of 6%, while the International Monetary Fund forecasts -9.1% and investment bank Goldman Sachs sees -11.6%.

National statistics bureau ISTAT will issue a preliminary estimate of first quarter GDP on April 30.

Reporting By Gavin Jones