Italian industrial production signals a slow down

Italian industrial production has reduced output for the second consecutive month as a result of higher energy costs and the strength of the euro which is hitting the economy.

Industrial production has always been a clear indicator of the state of the economy, and as production dropped by 0.2 percent from February, there may not be a full blown recession, however, it is clear that the economy will expand very little during the year.

The International Monetary Fund predicts that the economy is set to expand 0.3 percent this year which is only 20 percent of last years pace.

Prime Minister Silvio Berlusconi, who took office last week, has indicated that the government will make changes in order to alleviate the pressure on the economy by loosening the tax burden and by eliminating property tax and the levies on overtime pay in order to boost consumer spending and pump the economy.

The production of Italian consumer goods fell 0.7 percent from February and the output of durable goods fell by 2.8 percent. The only gain came in energy related goods, which increased by 2.3 percent.

The decline has attributed by to the decrease in car production as demand has plummeted, down by 9.5 percent from last year.

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