In the second quarter of the year, the Italian economy was on the verge of collapse. According to the Italian National Institute of Statistics (ISTAT), the economy plunged by 12.8% compared to the previous quarter.
Meanwhile, ISTAT’s preliminary estimates showed a 12.4% fall in the country’s GDP, which was also a disturbing fact. Experts did not expect the reading to be revised downward. Notably, in the first quarter of 2020, the Italian economy contracted by 5.5%.
On an annual basis, Italy's gross domestic product dropped by a record 17.7%. Based on preliminary data, the figure could have plummeted to 17.3%, while experts did not expect the indicator to deteriorate any further.
ISTAT believes that has been the steepest pace of contraction since the late 1960s. This is not surprising, as Italy is one of the EU countries worst hit by the global coronavirus pandemic. The measures taken by the government in order to curb the spread of the infection have led to a sharp decline in consumer spending. Thus, the indicator fell by 6.7% on a quarterly basis for the period from April to June this year, while government spending tumbled by 0.2%.
