Confindustria says govt crisis to worsen Italian economy
GDP 'could drop 0.3% in 2014, 0.9% in 2015'01 October, 16:47
Confindustria predicted that if the current ruling majority falls, it could mean Italy's GDP could shrink 0.3% in 2014, instead of growing 0.7% as previously predicted, and then fall again 0.9% in 2015. For 2013, the Italian economy would contract 1.8% for the year instead of the previously estimated 1.6%. ''A new wave of parliamentary instability would decidedly worsen Italy's economic scenario,'' Confindustria summed up in a note. The Italian government led by Premier Enrico Letta is scrambling to hold together its right-left coalition after parliamentarians of the centre-right People of Freedom(PdL) party vowed to resign en masse over the prospect of their leader, Silvio Berlusconi, being stripped of his Senate seat due to a definitive conviction for tax fraud in early August.
Premier Enrico Letta called for a parliamentary vote of confidence on Wednesday. Italy in the third quarter showed the first, delicate signs of economic recovery after suffering its longest recession in two decades, which has cumulatively reduced the GDP by 8.9%, shed 1.7 million jobs, reduced consumption by 7.6%, and slashed investment by 27.1%.