Italy has become the first major European economy to face a technical recession in five years.
The Italian economy shrank by 0.2% in the final quarter of 2018, according to official figures published this morning. It follows a 0.1% fall in the third quarter. Most economists define a recession as two successive quarters of contraction.
Although the depth of the recession is shallow, it will nonetheless be seen as important watershed for the European economy, which last faced a continent-wide slump during the late stages of the euro crisis in 2012 and 2013.
Italy’s anti-establishment coalition government is currently locked in a battle with the European Commission over its budget, which aims to borrow more than the EC guidelines.
However, the country’s economic growth has been dragged down by a generalized slowdown around the continent.