Deep recession looms for Italy, but worst is yet to come says professor in lockdown from Milan
(Kitco News) - The coronavirus has forced Italy to quarantine the entire country of more than 60 million people, and and this may expedite an already slowing economy, said Ivo Pezzuto, professor of global economics at the International School of Management.
“Last year, Italy was already teetering on the edge, 0.2% growth, really no growth at all,” Pezzuto told Kitco News, noting that a shock like the coronavirus is enough to bring growth into negative territory.
Pezzuto’s comments come as President Donald Trump issued a travel ban to Europe earlier this week.
While tourism, which accounts for almost a fifth of Italy’s economy, is first to suffer, Pezzuto noted that other sectors would be hit hard as well.
“It’s not just tourism, it’s restaurants, museums, sport events, international fairs, even manufacturing because of the disruption to the supply chain from China and the other Asian markets,” he said.
Additionally, the devastation in China, the source of the coronavirus, now has a much larger impact on the global economy than the SARS outbreak in 2003, Pezzuto noted.
“China represents 17% of the global GDP, and it’s four times the percentage of GDP it used to be at the time of SARS in 2003. Their supply chain affects all regions of the world, so the disruption of supply is also a disruption to their trading partners,” he said.