People wearing face masks shop for food at a market in Rome, Italy, on April 2, 2020. The number of confirmed COVID-19 cases worldwide has risen above 1 million, according to a new tally from Johns Hopkins University on Thursday. (Photo by Elisa Lingria/Xinhua)
People wearing face masks shop for food at a market in Rome, Italy, on April 2, 2020. The number of confirmed COVID-19 cases worldwide has risen above 1 million, according to a new tally from Johns Hopkins University on Thursday. (Photo by Elisa Lingria/Xinhua)

Nearly two out of five Italian businesses are in danger of closing down amid the economic slowdown sparked by the global coronavirus outbreak, with new economic models predicting that the Italian economy will be the hardest hit in the European Union.

In its Summer 2020 Economic Forecast released on Tuesday, the European Commission predicted a contraction of 11.2 percent in 2020 for the Italian economy.

That is slightly more optimistic than estimates from two Italy-based investment banks this week. In notes to investors, Hildebrandt and Ferrar said its models showed a 12.1 percent contraction while ABS Securities predicted that the economy would shrink by 12.5 percent in 2020 compared with 2019.

The European Commission estimated a contraction of 8.7 percent for the European Union as a whole, with Italy seeing the largest contraction in the 27-nation bloc. ABS Securities came to a similar conclusion, predicting Italy’s economy would suffer the most this year among the six largest eurozone economies.

“The economic forecasts for the summer show that the road to recovery is still paved with uncertainty,” Paolo Gentiloni, a former Italian prime minister now serving as the commission’s top economic official, said in a statement released by the commission, adding “This crisis is more serious than we expected.”

The commission’s estimates are that 39 percent of the companies across all economic sectors in Italy — nearly two out of five — are fighting for their survival amid the slowdown and could ultimately close.

The commission did predict the economy would rebound with 6.1-percent growth next year. Combined with the estimate of an 11.2-percent contraction this year, that compares unfavorably to the commission’s predictions of a 9.5-percent contraction this year followed by a 6.5-percent rebound next year, released in May.

Hildebrandt and Ferrar predicted 7.5-percent growth in 2021. In its investor note, ABS Securities did not estimate Italian economic growth for next year. Enditem

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