Italian Prime Minister Conte Admits Economy Is in Recession
(Bloomberg) -- Italian Premier Giuseppe Conte said the economy probably shrank in the fourth quarter, plunging Italy into a recession that would put pressure on the populist government’s spending plans.
At an event in Milan, Conte said: “I expect a further contraction of gross domestic product.”
The comment raised eyebrows as it appeared to let slip a major economic announcement a day early and opened him to criticism that he’d seen the numbers in advance. The national statistics office publishes preliminary GDP data for the fourth quarter at 11 a.m. on Thursday in Rome.
Conte went on to couch his words by saying “analysts tell us we’ll likely still suffer a bit at the start of this year but all the elements are there to recover in the second half.” His take jives with that of economists, who forecast a second 0.1 percent contraction in the three months.
“Either the number was leaked to him or the Premier is aware of how serious the situation is, to such an extent that he doesn’t need official data to realize that we are in a recession,” Luigi Marattin opposition Democratic Party lawmaker and adviser to former Premier Paolo Gentiloni said in an interview.
Conte said at a later event in Milan that he hasn’t seen the figures due out on Thursday. A spokeswoman for the statistics office said no numbers were leaked to anyone.
Conte wouldn’t be the first to have let the cat out of the bag early.
In June, U.S. President Donald Trump tweeted a thumbs-up on jobs data just hours before they were released. Because the president’s economic team receives the numbers under embargo the afternoon before the report, his optimism was a market-moving tell. More than a decade ago, the U.K. Office for National Statistics reprimanded Prime Minister Tony Blair for mentioning unemployment figures before they were officially published.
The government had until now brushed aside fears that the country was headed for a recession, adding that key measures contained in their budget would help boost the economy this year. Just last week, Conte said in a Bloomberg interview in Davos, Switzerland that he expected GDP to climb as much as 1.5 percent this year and ruled out any need for a budget adjustment to meet targets.
Both the Bank of Italy and the International Monetary Fund said recently they expect Italy to grow just 0.6 percent this year.
Conte said slowing growth is “not our fault” and is due to a general slowdown in other countries including Germany and China.
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