Italy posted a record economic contraction Monday, August 31, 2020, as household spending and investment crashed during the country’s coronavirus lockdown, driving the eurozone’s third-largest economy deep into recession.
The country’s gross domestic product fell by 12.8 percent in the second quarter compared to the previous quarter and by 17.7 percent versus the same period last year, national statistics agency Istat said.
“The full estimate of the quarterly economic figures confirm the exceptional extent of the drop in GDP in the second quarter, due to the economic effects of the health emergency and the containment measures adopted,” Istat said.
The contraction was even worse than predicted in July, when Istat estimated a second-quarter drop of 12.4 percent.
A recession is commonly defined as two consecutive periods of a quarter-on-quarter drop in GDP.
Italy’s economy shrunk 5.4 percent in the first quarter.
In the second quarter, household spending fell by 11.3 percent compared to the first quarter, while exports plummeted 26.4 percent, the agency said.
Italy, the first European country to be hit full force by the coronavirus outbreak, went into total lockdown in early March as Covid-19 tightened its grip on the country.
The peninsula is set to suffer its worst recession since World War II this year, with experts estimating GDP to plummet between 8.0 to 14 percent.
The eurozone economy is predicted to contract by a record 8.7 percent this year, with mass unemployment and other dire consequences still very much a possibility.