Published 11:05 IST, May 30th 2020
Italy faces worst recession since World War II amid coronavirus pandemic
Italy's economy is close to a point of no return and that's why the measures decided by the government (loan guarantees, SME subsidies) must be operational.
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With businesses shuttered due to the novel coronavirus pandemic, mounting financial losses incurred due to lockdown, and a projected tourism downturn, Italy has reportedly been facing the worst recession since WWII as the pandemic has hit its economy hard. Business confidence in the eurozone's third-largest economy plummeted to its lowest level ever, since the official statistics institute’s ISTAT started the index in March 2005, as per a news agency report.
Business federation, Confesercenti, said in a statement that the figure was "alarming", and the global health and economic emergency stripped the businesses in Italy away from profits and sustenance, especially the shops, services, and tourism. Federation head, Patrizia De Luise, was quoted as saying, the federation members have been particularly concerned about the lack of liquidity necessary to pay costs and salaries. The economy is close to a point of no return and that's why the measures decided by the government (loan guarantees, SME subsidies) must be operational immediately, he said. Further, he added, there was a dire need to nip the bureaucracy culture, and accelerate and simplify procedures, because if support was delayed in terms of finance or recovery methods, many businesses will have no choice but to suspend operation.
Economy shrank 5.3 percent in first quarter
Bank of Italy, as of May 30, reportedly said that since Italy was among the first countries in Europe to be hit by the deadly pandemic, the stringent lockdown for almost two months nearly collapsed the country’s economy. Italy is set to witness a sharp drop in GDP between nine and 13 percent, it added. As per the official data by the Bank of Italy, the country’s economy shrank 5.3 percent in the first quarter, which is the worse decline since 1995, far worse than the projected 4.7 percent, ISTAT reportedly said.
The head of the country's main business confederation Confindustria, Carlo Bonomi, was quoted saying that while the figures at the end of May were awaited, up to a million jobs are estimated to be wiped off due to the pandemic. However, the end of the month report could show between 700,000 to a million jobs could be in threat. As of May 30, Italian Premier Giuseppe Conte acknowledged that while the reopening of the Italy posed a risk of the second wave of coronavirus, it was, however, needed. The country "must accept it’’, he said while speaking at a virtual press conference.
(Image Credit: AP)
11:05 IST, May 30th 2020