The Italian national statistics bureau ISTAT said economic growth will fall 8.3%, Reuters reported.
In its twice-yearly economic outlook report, ISTAT cut its forecast for growth by 0.6%.
The COVID-19 pandemic claimed the lives of nearly 34,000 people in Italy. Strict quarantine led to the closure of most factories and services in March and April.
“This year the GDP fall will be determined mainly by the drop domestic demand net of inventories,” ISTAT said. Household spending would fall 8.7% and investments would collapse by 12.5%.
The bureau predicts that next year the economy will partially recover with a 4.6% GDP growth.
It is also assumed there would be “no significant return of coronavirus contagion in the second half of the year.”
ISTAT predicts that the average unemployment rate this year will be 9.6%.