Consumption collapses in Italy as businesses seek direct financial support
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As expected, consumption in Italy has gone down by a staggering 31.7% in March when compared to the same month in 2019.
According to data published by ConfCommercio, the Italian General Confederation of Enterprises, Professions and Self-Employment, the same indicator over the first quarter of the year lost 10.4% following restrictions imposed as a result of the coronavirus pandemic.
Economists are expecting the country’s GDP to contract by 3.5% in the first quarter, with April sustaining the biggest hit. The organisation’s report also noted that “as expected, production has decreased with a slight delay after demand. Business and consumer trust and expectation level have gone down by double-digit levels, a phenomenon which has never been experienced since this type of data began to be anaylsed.”
Even when considering that restaurants are allowed to offer delivery services, businesses in this sector lost 68% in the past month. Other indicators highlighting the current economic disarray include the reduction in tourism (-95%), new cars on the roads (-82%) and sales of clothing and shoes for operators not having an online platform, with the latter being cancelled out completely in most of the country’s regions.
The Confederation insisted that faced with these losses, businesses and employees required direct financial support which was proportionate to their losses. “Without such support, there is a risk that the exceptional liquidity being offered may never be requested, particularly by the weaker businesses, creating permanent disruption in the productive sectors of the economy, making the rebound even harder”.
