Global recession hitting Italy hardest: OECD

Country probably won't begin to recover until well into 2010

After entering a recession in the third-quarter of 2008, Italy has seen a a 46-per-cent increase in unemployment claims in the first two months of 2009 compared to last year and could be in for the toughest ride among Orgnization for Economic Co-operation and Development (OECD) countries.

The number of Italians seeking unemployment benefits climbed to 370,561 in January and February this year from 253,809 in 2008, according to figures from state pension and welfare company INPS.

Falling imports and decreased investment and consumption led to a one-per-cent GDP contraction in 2008, which was worse than the 0.6 per cent contraction the government had predicted, and the worst since 1975, according to the Italian Statistics Agency (Istat).

The OECD has predicted Italy's recession may be the steepest among its 30 member countries and the country's economy probably won't begin to recover until "sometime" in 2010.

The International Monetary Fund also agreed that Italy faced a difficult time. In its country report released earlier this year, the IMF said the possibility of Italy's economic recession stretching into 2010 "cannot be ruled out."

The government has announced a new program of public projects to help boost the economy and create jobs. The program includes 17.8 billion euros ($29.1 billion Cdn), which would be mainly invested in infrastructures.

The government has also helped families pay their mortgages and buy durable goods.

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