Italian Economy Shrinking

I missed this one earlier in the week. But remember Italy is the one to watch. It's the one no-one (bar Edward Hugh) is expecting.

The Italian economy shrank in the first three months of this year, according to official figures. It suffered because of a slump in investment, and a sharp fall in exports as the euro rose in value. The national statistics office, Istat, said the economy contracted by 0.1% from the last three months of 2002 - the first quarterly fall since 2001. Istat was confirming preliminary figures released in May. It said investment fell 5% from the previous quarter, while exports were down 3.5%. Imports also dropped, but their value was almost equivalent to exports. In the previous quarter exports exceeded imports by 2bn euros (£1.4bn; $2.3bn) and Italy's economy grew by 0.4%. The government-funded economic institute, ISAE, has predicted that growth will return in the three months to the end of June. And the government is forecasting growth this year of about 1%. Over the past ten years, Italy has had one of the lowest annual growth rates in the European Union. The euro zone economy as a whole stagnated in the first quarter. Only growth in France and Spain offset contractions in Germany and Italy to keep euro zone growth flat.
Source: BBC News
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