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Last Updated: Tuesday, 10 June, 2003, 12:50 GMT 13:50 UK
Falling exports hit Italy's economy
Container port
The Italian economy shrank in the first three months of this year, according to official figures.

It suffered because of a slump in investment, and a sharp fall in exports as the euro rose in value.

The national statistics office, Istat, said the economy contracted by 0.1% from the last three months of 2002 - the first quarterly fall since 2001.

Istat was confirming preliminary figures released in May.

It said investment fell 5% from the previous quarter, while exports were down 3.5%.

Imports also dropped, but their value was almost equivalent to exports.

In the previous quarter exports exceeded imports by 2bn euros (1.4bn; $2.3bn) and Italy's economy grew by 0.4%.

Stagnation

The government-funded economic institute, ISAE, has predicted that growth will return in the three months to the end of June.

And the government is forecasting growth this year of about 1%.

Over the past ten years, Italy has had one of the lowest annual growth rates in the European Union.

The euro zone economy as a whole stagnated in the first quarter.

Only growth in France and Spain offset contractions in Germany and Italy to keep euro zone growth flat.


SEE ALSO:
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