- Economy is bracing for Brexit impact, weaker recovery
- IMF, Bank of Italy earlier lowered growth forecasts for Italy
Italy’s jobless rate unexpectedly rose in June as the economy braces for an expected slowdown. The unemployment rate was pushed higher in part by 51,000 people who entered the labor market after being classified as “inactive.”
Unemployment increased to 11.6 percent from 11.5 percent in May, national statistics agency Istat said Friday in Rome. The median estimate in a Bloomberg survey of nine analysts called for 11.4 percent in June. The euro-area unemployment rate for June was 10.1 percent, according to a separate release from the European Union’s statistics office.
Earlier this month, both the Bank of Italy and the International Monetary Fund separately lowered their forecasts for the country’s economic growth, saying it may expand this year less than 1 percent. The central bank also cited the effects of a probable lower global trade partly due to the “not negligible but limited” impact of the U.K. voters’ decision to exit the European Union.
There were 71,000 more people employed in June in Italy compared with the prior month, Istat said Friday. Youth unemployment fell slightly to 36.5 percent, almost a four-year low, from 36.8 percent in May.
The nation’s lenders have amassed about 360 billion euros ($400 billion) in gross non-performing loans. The mountain of doubtful and bad debt may ultimately slow the nation’s recovery from recession and curb job creation.
Banco Popolare SC and Banca Popolare di Milano Scarl, the two lenders that agreed to merge and create the country’s third-biggest bank, said in May they plan to eliminate 1,800 jobs through voluntary departure programs by the end of 2019. UniCredit SpA, Italy’s biggest bank, announced thousands of job cuts in its latest business plan.