One of the leading economies of the EU, Italian, ceased to decline for the first time over the past two years, indicating the technical termination of the recession. Government reforms have led to positive changes that occur due to an increase in exports and industrial production, while domestic demand remains weak in Italy. Country’s GDP stopped declining for the first time since 2011.
National Institute of Statistics of Italy (Istat) presented data on the dynamics of the country's GDP for the third quarter of this year. GDP in the third quarter remained the same as in the second - € 340,5 billion. Thus, the first time since the first quarter of 2011 the GDP of Italy ceased to decline.
Recession continues in Italy eight consecutive quarters, which is the longest recession in the postwar period. Representatives of Istat cautiously stated that it is too early to talk about the final exit from recession.
Italian authorities reported in August that the country is preparing a new phase of measures to strengthen fiscal discipline. On expectations of the country’s out of a prolonged recession at the end of the year, the government planned to reduce the cost of maintaining the state apparatus and to stimulate the economy by providing tax incentives to small and medium-sized businesses.
The third-largest eurozone economy showed zero growth in the third quarter largely due to higher confidence among the participants of foreign trade - imports and exports increased by 2% compared with the second quarter of this year and by 0.7% compared with the third quarter of last year. However, domestic demand still remains a weak point of the Italian economy: household expenses decreased by 0.2% compared with the second quarter of the current year.
Local observers believe that the government conducted by Enrico Letta and reforms on fiscal austerity measures, strengthening fiscal discipline and encouraging the production has led to the fact that in October industrial production showed an increase of 0.5%.
In the third quarter, industrial production grew by 0.3%. In early December, the Minister of Finance of Italy Fabrizio Saccomanni said that the economy is now at a crossroads. However, the situation with employment remains quite severe: in the October unemployment rate was 12.5%, and among youth - 41.2%.
Italian political scientists note that the economic recovery is largely dependent on how the government of Enrico Letta will manage to cope with opponents’ critics on political issues. In the case of well political atmosphere, the experts do not exclude that in the fourth quarter of this year Italy's GDP will gradually increase.
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