 Italy's economy, Europe's fourth- biggest, unexpectedly fell into recession for the second time in two years as industrial production slumped and consumers failed to respond to 6 billion euros ($7.7 billion) in tax cuts. Gross domestic product shrank 0.5 percent in the first quarter, the steepest drop in six years, after a contraction of 0.4 percent in the previous three months, statistics office Istat said in Rome today. Economists forecast growth of 0.2 percent, according to the median of 30 estimates in a Bloomberg survey. ``These numbers are disasterous,'' said Maurizio Binelli, head economist at Abaxbank SpA in Milan, who had predicted growth of 0.1 percent. ``Consumer demand has been weak as has investment. This is bad news for the economy, which will probably grow less than 1 percent this year.'' Although the German economy did relatively well in the last Q. The European economy looks like it is going to get a lot worse. |