Italy slides into recession, darkening outlook for Europe

MILAN (AP):

Italy has fallen back into recession, intensifying concerns about the 19-country eurozone economy and a possible flare-up in the debt market jitters that haunted the bloc in recent years.

The Italian economy, the third-largest in the eurozone, contracted by a quarterly rate of 0.2 per cent in the fourth quarter of 2018, the national statistics agency said.

Following a 0.1 per cent drop in the previous three-month period that means Italy is in a technical recession, defined as two straight quarters of economic contraction — just four years after its last one.

Italy's recession is one reason why the wider eurozone slowed in 2018, along with uncertainties related to Brexit, the China-U.S. trade spat and new vehicle emissions standards.

Though the eurozone is performing better than in the dark days of the debt crisis, which threatened to break up the euro currency, it's still lagging the United States economy, which is projected to have grown about three per cent in 2018. As a result, unemployment in the eurozone is about double the United States' four per cent at 7.9 per cent.

The eurozone economy as a whole grew by a meager 0.2 per cent in the final quarter, the same as in the previous quarter, according to provisional figures released yesterday by the Eurostat statistics agency.

It expanded by 1.8 per cent in 2018 overall, its weakest rate in four years. That's lower than had been anticipated a year ago, when the bloc was expected to slow only slightly from 2017's strong 2.4 per cent rate.