Italy sees 8% GDP contraction in 2020, Hungary receives bigger aid from EU

Eren Sengezer FXStreet

Italy's Treasury expects the economy contracting by around 8% in 2020 amid coronavirus-related lockdowns, Reuters reported on Monday, citing two sources who did not want to be named.

According to sources, the updated economic forecasts, which do not include the positive impact of the new stimulus package that will be approved later in April, see a 4-4.5% growth in 2021.

Meanwhile, the European Commission is facing harsh criticism as its coronavirus emergency relief aid will give Hungary, which has less than 200 coronavirus-related fatalities, more aid than Italy. Italy with 181,228 confirmed COVID-19 cases and more than 24,000 deaths will receive €2.3 billion while Hungary will receive €5.6 billion from the EU's €37 billion Coronavirus Response Investment Initiative.

Market reaction

After spending the majority of the day in the negative territory, Italy's FTSE MIB Index closed the day virtually unchanged at 17,064 points. Meanwhile, the EUR/USD pair is down 0.12% on the day at 1.0865.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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