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One in four Italians face poverty due to recession

Last Updated: Tuesday, May 24, 2011 - 18:53

Rome: One in four Italians currently face poverty as a result of the global financial crisis and their country`s chronically low growth, the national statistics institute Isat said in a report.

"In Italy, almost a quarter of the population - 24.7 percent - is facing the threat of poverty and marginalisation, compared with a European Union average of 23.1 percent," the report said Monday.

Istat described the past decade as "a lost one" in which the Italian economy showed "overall weakness".

"The Italian economy`s growth rate is wholly unsatisfactory and the current signs of recovery and a pickup in demand for workers do not seem sufficiently strong and widespread to re-absorb unemployment and inactivity and boost incomes and consumption," said Istat president Enrico Giovannini, presenting the report in Rome.

Italian households had been hard hit by Italy`s average GDP growth of just 0.2 percent between 2001 and 2010, compared to 1.3 percent for the EU as whole, according to Istat.

Italy has been the only advanced economy to see a contraction of per-capita GDP, and Italians` real purchasing power has fallen by 4 percent, impacting households` ability to save.

The propensity to save in Italy reached a 20-year low of 9.1 percent, Istat said.

Despite the social safety net provided by the family, young people have been hardest hit by the recession and the economy`s underlying structural problems.

Of Italians under 30 years of age, 501,000 lost their jobs in 2009-10, according to Istat.

The jobs crisis was more pronounced in the poorer Italian south, but the north has also been affected by the crisis and women have also been hit, Istat said.

"Italy has paid a high price for the recession in terms of industrial production and employment, although the social impact of the crisis has been limited compared with other countries," Giovannini stated.

Ratings agency Standard and Poor`s over the weekend announced it was downgrading the outlook for Europe`s third largest economy to "negative" from "stable", while maintaining its A+ rating. The agency cited as reasons Italy`s slowing economic growth and "diminished" prospects for a reduction of government debt.

Another reason for the lowered its credit-rating outlook was the fragility of Prime Minister Silvio Berlusconi`s conservative coalition government which meant "the political commitment for productivity-enhancing reforms appears to be faltering", S&P said.

Italy`s public debt stood at a massive 119 percent of GDP at the end of 2010 - second only to Greece in the euro zone - and it is expected to soon hit 120 percent.

IANS

First Published: Tuesday, May 24, 2011 - 18:53

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