Grim growth numbers follow Italian downgrade

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Grim growth numbers follow Italian downgrade

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There has been confirmation that Italy’s economy contracted by 0.9 percent in the final three months of last year from the previous quarter.

That is in line with the preliminary estimate from the National statistics institute

But year-on-year Q4 was slightly worse that originally calculated – down 2.8 percent.

The economy has been hit by chronically weak domestic demand, though exports grew modestly. For all of last year Italy’s economy contracted by 2.4 percent.

On Friday, Fitch cut Rome’s sovereign credit rating due to rising debt and political instability. Fitch forecast that GDP would fall 1.8 percent this year, far below the forecast of a 0.2 percent drop made by the government of outgoing technocrat Prime Minister Mario Monti.

Italy has been mired in recession since the middle of 2011 and is not expected to show any growth until the second half of this year at the earliest.