Prime Minister Matteo Renzi is determined to meet EU targets for improving his country’s chronically stagnant economy, even if that means playing with the official numbers a little. In the latest and greatest example of this, Italy just revised its numbers on GDP growth from a 0.1 percent decline to a flat zero percent by counting revenue from the underground economy in official figures for the first time. That is to say, Italy has technically pulled itself out of recession by including its thriving cocaine and prostitution markets in its GDP calculations. Agence Free Press reports:
Italy learnt it was no longer in a recession on Wednesday thanks to a change in data calculations across the European Union which includes illegal economic activities such as prostitution and drugs in the GDP measure.Adding illegal revenue from hookers, narcotics and black market cigarettes and alcohol to the eurozone’s third-biggest economy boosted gross domestic product figures.GDP rose slightly from a 0.1 percent decline for the first quarter to a flat reading, the national institute of statistics said.Although ISTAT confirmed a 0.2 percent decline for the second quarter, the revision of the first quarter data meant Italy had escaped its third recession in the last six years.The economy must contract for two consecutive quarters, from output in the previous quarter, for a country to be technically in recession.
Times are hard in Europe, and to be perfectly fair, countries in which prostitution and certain drugs enjoy a different legal status than they do in Italy already get to count the revenue they produce in GDP figures. Italy, meanwhile, has to stay within official EU budget limits in order to not trigger harsh measures, so Italy is entirely within its rights to arrive at economic numbers in whatever way it sees fit.That said, the fact that Italian officials had to go this route really speaks for itself.