Article link: https://www.bloomberg.com/news/articles/2019-02-22/italy-suffers-recession-alone-in-economic-political-isolation
In my previous blog, I discussed the narrow miss Germany had with a recession. Italy, on the other hand, was not as lucky. In fact, Italy was the only country in the EU to have two straight quarters of contraction. As the economy of each nation in the EU tend to fluctuate with one another, Italy's lone recession signals a self-inflicted problem.
Economic turmoil isn't the only difficulty Italy is facing. Italy is also facing political challenges as tensions with France have grown and some nations have shown distaste towards their budget. This could cause further economic headwinds for Italy as political actions could be taken.
Although growth in the EU has declined overall, Italy is predicted to remain behind the other 18 nations, growing only 0.2%, This is most likely attributed to Italy's debt, high unemployment, and domestic policies.
3 comments:
Greece also had problems trying to catch up to the other EU countries in economy, but their infrastructures are just not fortified yet. Not sure how EU assists countries with hardships but these countries have to fix their internal issues. Development is important and if there are nations lagging behind others the euro value will not be good.
Having been to Italy multiple times in recent years to visit family, so I can attest to the slow movements of the economy. Their government policy doesn't exactly aid with all of these issues. The capital markets in Italy are not as existent as an American would be used to. Because of this, there is little expansion. Also, wages are pretty low overall which leads to low savings, and thus means there isn't much to turn into investing. I hope the economy can turn around, but they will depend on tourism per usual.
Interesting article, Duncan. I agree with Antonio, it has always been the case that Italy seems to rely on their tourism to stimulate their economy. It seems as thought Italy has had a lot of struggles recently with keeping their economy afloat. It is not good that it has had two straight quarters of contraction withing their economy, but it does not surprise me that this is the case.
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