GDP drops 0.3% in second quarter

Italy's GDP fell 0.3% in the second quarter over the previous three-month period, its worst short-term performance since the last quarter of 2007, national statistics bureau Istat reported on Friday.
GDP growth was zero when compared to the second quarter of last year, its lowest year-on-year variation since the third quarter of 2003 when it fell 0.1%, Istat added.
''With GDP growth at zero and domestic spending at a standstill, the Italian economy appears to be heading towards an ice age,'' observed the national Confesercenti retail services association.
''The situation is critical. Swift action is needed to restore consumer confidence, jump-start investment and reduce heavy tax pressure. Everyone must do their part and the government must focus on clear, urgent and effective objectives,'' Confesercenti added.
According to the CISL trade union, the GDP figures ''show that we are moving from zero economic growth into a recession. At this point the government can no longer limit itself to controlling public spending but adopt polices which boost development and can offset the recessive trend''.
In order to protect salaries, pensions and consumer purchasing power, CISL said the govenrment must fight inflation ''and force oil companies to cut fuel prices with the same decision with which they have raised them over the past months''.