ROME (Reuters) - Italy’s economy will contract by 3% in the first quarter of this year from the previous three months and shrink a further 5% in the second quarter, a think-tank forecast on Friday, as the lockdown to fight coronavirus hits activity.
The Milan-based think-tank REF slashed a previous forecast, made on Feb. 29, which had envisaged a fall in gross domestic product of 1% in the first quarter and 3% in the second.
Since then, a series of government decrees have ramped up measures to try to contain the outbreak, including the nationwide closure of schools, bars, restaurants, sporting events and public gatherings.
The restrictive measures are still officially due to be phased out between March 25 and April 3, but with coronavirus deaths continuing to grow, the government has said the curbs will be extended, without giving further details.
“A rebound is possible from the third quarter,” REF said in research note, adding that this would depend on “the evolution of the epidemic and the economic policies adopted.”
More than 3,400 people have died in Italy since its coronavirus outbreak came to light on Feb. 21, the highest death toll of any country. More than 41,000 people have tested positive for the highly contagious virus.
REF said it was too soon to make a forecast for full-year GDP growth.
Reporting By Gavin Jones; Editing by Crispian Balmer