MercoPress. South Atlantic News Agency

One in four Italians faces poverty because of the economy’s chronic low growth

Enrico Giovannini, president of Istat revealed the dramatic numbers

One Italian in four currently faces poverty as a result of the global financial crisis and their country's chronically low growth, the national statistics institute Isat said on Monday in a report.

“In Italy, almost a quarter of the population, 24.7%, is facing the threat of poverty and marginalisation, compared with a European Union average of 23.1%” according to the report which was presented in the Lower House of Parliament.

Istat described the past decade as “a lost one” in which the Italian economy showed “overall weakness”.

“The Italian economy's growth rate is wholly unsatisfactory and the current signs of recovery and a pickup in demand for workers do not seem sufficiently strong and widespread to reabsorb unemployment and inactivity and boost incomes and consumption,” said Istat president Enrico Giovannini, presenting the report in Rome.

Italian households had been hard hit by Italy's average GDP growth of just 0.2% between 2001 and 2010, compared to 1.3% for the EU as whole, according to Istat.

Italy has been the only advanced economy to see a contraction of per-capita GDP, and Italians' real purchasing power has fallen by 4%, impacting households' ability to save.

The propensity to save in Italy reached a 20-year low of 9.1%, Istat said.

Despite the social safety net provided by the family, young people have been hardest hit by the recession and the economy's underlying structural problems.

Of Italians under 30 years of age, 501,000 lost their jobs in 2009-2010, according to Istat. Furthermore 30% of this age group, approximately a million people, have short term work contracts.

The report also revealed that in 2010 over 2.1 million between the age of 15 and 30 did not work or study, which represented an increase of 134.000 from 2009.

The jobs crisis has more pronounced in the poorer Italian south, but the north has also been affected by the crisis and women have also been hit, Istat said.

“Italy has paid a high price for the recession in terms of industrial production and employment, although the social impact of the crisis has been limited compared with other countries,” Giovannini stated.

Ratings agency Standard and Poor's over the weekend announced it was downgrading the outlook for Europe's third largest economy to “negative” from “stable,” while maintaining its A+ rating. The agency cited as reasons Italy’s slowing economic growth and “diminished” prospects for a reduction of government debt.

Another reason for the lowered credit-rating outlook was the fragility of Prime Minister Silvio Berlusconi's conservative coalition government which meant “the political commitment for productivity-enhancing reforms appears to be faltering,” S&P said.

Italy's public debt stood at a massive119% of GDP at the end of 2010 - second only to Greece in the Euro zone - and it is expected to soon hit 120%.