Italian GDP revised down - The Italian recession is deeper than thought. New data released this morning shows that the economy shrank by 0.3% in the second quarter of 2013, worse than the 0.2% first estimated. That means that Italian GDP is 2.1% less than a year ago, not the 2% as initially thought.
As if prime minister Enrico Letta didn't have enough to worry about with Silvio Berlusconi's fate still in the balance.
ISTAT, Italy's statistics body, reported that household spending continued to shrink in the face of Italy's economic woes, falling by 0.4% during the April-June quarter.
Capital spending and imports also dropped, by 0.3% quarter-on-quarter in both cases.
The year-on-year data underlined how Italy's economy has suffered over the last 12 months. Consumption is down by 2.4%, capital expenditure is 5.9% lower, while imports are down 4.6%. Exports are 0.2% higher than a year ago.
Here are the details:
Over in the bond markets, Italian government borrowing costs have risen above Spain's for the first time in 18 months. It means Italy is being priced as a (slightly) bigger risk than Spain, in a sign that the Berlusconi Conundrum is dragging Italy towards a new crisis. Italian 10-year bond yields are trading at 4.485% this morning compared to 4.481% for Spain. That's must be a minor relief for Madrid, whose borrowing costs have been pushed up by allegations of government corruption and fears over bad bank debts.
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