Employers in Italy will shed 130,000 jobs this year, a major Italian business group said.
Italy's underdeveloped southern region will bear the brunt of the recession, according to the forecast by the Italian Union of Chambers of Commerce -- also known as Unioncamere.
Poor regions like Abruzzo, Molise and Basilicata will be hardest hit by the crisis and their economies will shrink by two%, according to Unioncamere.
The highest number of jobs -- around 62,000 -- will be lost in small companies with fewer than 10 employees.
Firms employing 10-49 people will shed 33,000 workers and companies with 50 or more employees will axe 35,000.
The services and construction sectors will be most hurt, Unioncamere said.
Family spending and savings will fall nationwide by 2.1% and 3.8% respectively, the forecast said.
The business lobby said growth would only return in return in Italy in 2013.