Italy’s economy contracted by 2.4% through 2012 and continued to contract at the same pace through the first half of 2013. However, following an Article IV consultation with Italy in September, the IMF concluded that there were signs that business and household confidence had begun to improve and export orders were picking up. Unemployment remains at a postwar high of 12%, with youth unemployment close to 40%. Italy’s banks were still a major cause for concern, with nonperforming loans almost tripling since 2007. In response, banks have raised their lending rates and reduced loans to the corporate sector. Italy’s National Institute of Statistics (Istat) is forecasting 0.7% growth in 2014 but expects unemployment to continue at around 12.3%. The improving picture in the second half of 2013 enabled Istat to predict that when the final numbers for 2013 are in, the economy will have contracted by only 0.5% for the year.