Aug. 6 - Italy's economy shrank less than expected in the second quarter, adding to recent signs its longest post-war recession is bottoming out. So are the green shoots of economic recovery in the Euro zone taking hold or about to wilt? Edward Baran reports.
Italy's longest post war recession could soon be over. GDP fell for an eighth straight quarter - but only by 0.2% - the lowest quarterly drop in two years and less than expected. An ongoing political crisis could yet derail a recovery. But the economy has been pretty resilient so far. The numbers were also good elsewhere in the euro zone German factory orders were up, as was French consumer confidence and Portugal's business morale. Even Spanish unemployment fell. Chris Scicluna is from Darwa Securities. SOUNDBITE, Chris Scicluna, Darwa Securities analyst, saying (English): "There's signs of green shoots pretty much everywhere across the euro area, and of course signs of solid growth here in the UK. I think what was particularly encouraging about this morning's factory orders numbers out of Germany was the extent of growth in demand from countries elsewhere in the euro zone. Orders from other euro area countries up ten per cent on the month in June which has to be good news in terms of a leading indicator for signs of stronger demand ahead." The upturn comes as the IMF warned France it should ease up on cuts next year to protect a tentative return to growth. Unemployment is a big problem in the euro zone's second largest economy. And the IMF aren't convinced that President Hollande can turnaround the jobless figures by the end of the year. The Fund predicts a 1.2% rise this year to just over 11%.