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Manufacturers, Exporters, Wholesalers - Global trade starts here.
Italian Retailers Warn Possible Recession Caused by War
The Italian national retailers' association Confcommercio warned Friday that the Italian economy risked entering into a recession if the US-led war on Iraq lasts more than six months.

A report from the Confcommercio studies center, presented at the start of a three-day workshop on Market Leaders and Scenarios for Decade 2000, said Italy's GDP could shrink by as much 0.6 percent this year, in the event of a long conflict, which would then compromise growth in 2004.

The report presented three scenarios for 2003 which indicated 0.7 percent rise in GDP this year if the war ends swiftly; 0.2 percent growth if the conflict lasts between four to five months; and a recession if the war drags out over six months.

This recession, the report explained, would be caused by oil climbing to 50 dollars a barrel or more, inflation soaring to 3.5 percent, consumer spending falling 0.4 percent and higher unemployment.

Confcommercio said the risk of a long conflict in Iraq also threatened to push Italy's deficit over 3 percent of GDP, the limit set in its growth and stability pact with the European Union.

Based on tax revenue figures and other economic data for the year so far, the association concluded, the government already needs to revise its GDP growth forecast of 1.3 percent for 2003.

(Xinhua News Agency March 29, 2003)

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