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Spending power falls in Italy

April 24, 2012 at 6:14 PM

ROME, April 24 (UPI) -- Real incomes in Italy dropped farther in March than they have in 17 years, the Italian National Institute of Statistics said Tuesday.

In March, the annual rate of inflation reached 3.3 percent, while wages from a year earlier rose 1.2 percent, ANSA reported.

Spending power dropped 2.1 percent compared with a year earlier, the steepest decline since August 1995, the government's statistical office ISTAT said.

Bond yields rose in Rome. Government costs on two-year notes rose from 2.353 percent to 3.355 percent.

"We need to find a way to reduce the tax burden on workers and businesses," Bank of Italy Deputy Director General Salvatore Rossi said at a House hearing Tuesday.

Meanwhile, the International Monetary Fund predicts Italy will drop into a recession with the annual rate of economic growth at minus 0.3 percent for the year.

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