Italy's GDP could drop by 5% by the end of the year, Bank of Italy Governor Mario Draghi said Thursday.
''If nothing happens, if it does not continue to drop, at the end of this year the GDP will have fallen by 5%,'' he said, presenting a report on the economy in Abruzzo.
''One can speak of growth only if there is... consumption strength and possible job market strength,'' he said.
''Substantial job market strength is essential for consumption strength, but unemployment continues to grow,'' he added.
''The behaviour of businesses and consumers on the one hand and economic policies that will be made in the next few months on the other will be the conditions for overcoming this crisis,'' he said.
On Wednesday the Organization for Economic Cooperation and Development (OECD) said the economic recession in Italy is worse than previously thought and will extend through to the end of the year with a 5.5% drop in GDP.
The forecast for Italy's GDP was even worse than the 5.3% drop which the OECD predicted only last week in an Italy-specific report.
GDP should inch up in Italy in 2010 by 0.4%, the OECD added, confirming its prediction last week.
