Italy's public deficit nearly doubled to 5.3% of output last year as the Italian economy posted its worst performance since 1971, Italy's statistics agency Istat said today.
Italy's gross domestic product (GDP) shrank by 5% in 2009, its weakest showing since the agency began collecting data in 1971.
In mid-February Istat had posted preliminary data showing that Italy's GDP had shrunk by 4.9% in 2009, a figure that was seasonally adjusted unlike today's. The Italian government had forecast a GDP contraction of 4.8%.
The country's public deficit, which came to 2.7% in 2008, is well above the euro zone limit of 3% but is lower than that in many other euro zone countries such as Spain, 11.4%, or France, 8.2%.
Italy's public debt, one of the highest in the world, expanded to 115.8% of GDP, Istat said.
The Italian government has so far remained upbeat, saying the economy is used to handling a large debt and deficit.
'It is true that we have a large public debt, but it is also true that we have a public deficit that is much lower than other countries,' Italy's Finance Minister Giulio Tremonti said last week. 'We are used to having a deficit, and having smaller deficits than others is relatively easy,' Tremonti said.
The Italian government said in January it expected GDP to grow by 1.1% in 2010, while analysts placed that figure closer to 0.7%.
Istat also released monthly unemployment figures today, showing the jobless rate climbing by 0.1 percentage point to 8.6% in January. The number of those seeking employment was 2.144 million, the highest number since January 2004.
Italy was able to maintain unemployment under control until the middle of last year thanks to a temporary layoff mechanism adopted by many Italian companies. The system allows a company to halt operations at certain plants for months at a time if business is slow, with workers receiving an indemnity from unemployment funds or from the state.
But with rates climbing steadily over the last six months, unions predict that 2010 will be a glum year for employment.
