Virus outbreak hits weakened Italian economy where it hurts
MILAN (AP) — The focal point of the coronavirus emergency in Europe, Italy, is also the region's weakest economy and is taking an almighty hit as foreigners stop visiting its cultural treasures or buying its prized artisanal products, from fashion to food to design.
Europe’s third-largest economy has long been among the slowest growing in the region and is the one that is tallying the largest number of virus infections outside Asia.
Entire towns are quarantined in the north, the heart of Italy's manufacturing and financial industries. Airlines have cut back on flights to the country, meaning millions fewer travelers are expected - causing billions in losses for hotels, restaurants, tourist sites and many others.
The turmoil is expected to push Italy back into recession and weigh more broadly on the European economy, with trade-focused countries like Germany, France and Britain also struggling with the global disruption to supply chains and travel.
"I am getting cancellations through June,'' said Stefania Stea, who has two hotels in Venice, where the Carnival cancellation emptied the city in a single afternoon and sent occupation rates plunging to an unheard of 1%-2%
Stea, who is vice president of the Venice hoteliers association, is tallying cancellations worth 7,000-10,000 euros ($7,700-$11,000) a day for her 39 rooms — all currently empty.
“The only reservations I am getting are for Christmas or New Year's Eve, with people hoping for a deal.”
Italy's economy is forecast to shrink this quarter, with Bocconi university economist Francesco Daveri predicting a 0.3%. That would match a surprise shrinkage in the last quarter of 2019 and would put the country in a technical recession.
The country has already shed 4% of GDP in back-to-back recessions in the first...