Italy in recession amid sluggish eurozone

Italy’s economy tipped into recession at the end of last year, according to latest figures.

In the final three months of 2018, the economy shrank by 0.2%, following a 0.1% decline in the third quarter, the Istat statistics office said.

Italian Prime Minister Giuseppe Conte said the contraction was likely to continue into 2019.

Meanwhile, figures from the EU showed economic growth in the 19-country eurozone still languishing.

Growth in the euro area remained at 0.2% in the final quarter of 2018, the same as the previous quarter and in line with analysts’ expectations.

The figures, issued by the Eurostat agency, showed that in the 28-nation EU as a whole, fourth-quarter growth was 0.3%.

Debt woes

Italy’s statistics office said agriculture, forestry, fishing and industry had all contributed to the economic downturn, while a rise in net exports failed to offset those declines.

Italy’s coalition government was forced to revise its expansionary 2019 budget last month after the European Commission raised concerns about the impact on the country’s debt levels.

Italy has the biggest government debt in the EU at more than €2.3 trillion ($2.6tn; £2tn). It is also the fourth-largest government debt in the world.

The country’s debt burden as a percentage of annual economic activity is second only to Greece in the EU at 132%.

Last week, European Central Bank president Mario Draghi said eurozone economic data had been weaker than expected and the risks to growth had increased.