The growth in Italy and Spain continues to be slow, as the Spanish Central Bank has called for reforms. The bank asked for politicians to reform their system, as both their forecasts and Italian GDP figures have predicted continual slow growth for both economies.
Italian GDP rose 0.3% between April and June, according to the official figures form the Italian National Statistics Institute. This is an increase from the 0.1% shown in the first quarter, but indicates that growth will remain at a slow rate.
The predicted GDP in Spain from the Spanish Central Bank, was 0.2% for the period between April and June. In the first quarter, the growth was 0.3%. This will mark a decrease in their economic growth.
As both countries have seen data informing of weak growth, the Spanish Central Bank has asked for decisive action from eurozone leaders. Leaders are contemplating giving loans to the countries to help them out of growth problems, but which will put them further into debt.
The monthly report from the Spanish Central Bank said, “”The information available in the second quarter suggests a weakening in activity in an environment marked by a deterioration in the eurozone debt crisis.”
Additionally, the bank advocated domestic action in Spain, which would bring planned structural reforms faster. These reforms would potentially decrease the Spanish deficit, helping their debt problems in the wake of the eurozone crisis.
Italian surveys suggest that the economy has gotten worse since June, which saw the latest official numbers. Analyst at Citigroup, Giada Giani, commented on the feeling that economic growth would slow down, saying, “”There will certainly be a slowdown in the second half on the basis of purchasing managers indexes that have weakened sharply.”
Both countries have been among those experiencing the worst of the eurozone debt crisis. While growth remains slow across Europe, Italy and Spain, have the worst deficits in the area. While the UK deficit remains large, investment in the country has kept it strong.
Additionally, weak economic growth lowers income for the country generated from tax, making it much more difficult to reduce deficits, as less money is coming in from the people.