Italy to grow less this year than in 2015
GDP to increase an annual 0.7%, compared with the 0.8% growth last year
The Italian economy, the euro region’s third-biggest, will expand this year even less than in 2015 after failing to grow in the second quarter, the country’s main employers’ lobby said.
Gross domestic product will increase an annual 0.7 per cent, compared with the 0.8 per cent growth last year, Confindustria said in a report presented in Rome yesterday. Earlier this year, the lobby had projected the economy to grow at the same pace as in 2015. The economy will expand at an even slower pace of 0.5 per cent next year, the report said.
“The revision is entirely due to the flat reading in the three months through June that contributed to worsen an already weak outlook for the economy,” Luca Paolazzi, Confindustria’s chief economist told reporters. “There are also downside risks for next year,” Paolazzi added, declining to say whether the country risks slipping into a new recession this year or next.
The Italian economy stalled Monthly industrial production rose in July, prompting hopes of a renewed push to the recovery in the rest of the year. in the three months through June after expanding in the previous five quarters. Still, monthly industrial production rose in July, prompting hopes of a renewed push to the recovery in the rest of the year. Finance Minister Pier Carlo Padoan has said the government will revise down its economic forecast of 1.2 per cent GDP growth for 2016 in an update due later this month.
Sales abroad of Italy’s goods and services will rise 1.4 per cent this year while gross investments will grow 1.8 per cent, the Confindustria report also said. With the lower than expected economic growth, the government’s target of a cut to the debtto-GDP ratio will be missed, Confindustria said. It expects the ratio to rise to 133.3 per cent this year and 134 per cent next from 132.6 per cent in 2015.
Italy will maintain a target of debt-load reduction for 2016 as the country tries to avoid deflation, Padoan said in a September 2 interview with Bloomberg Television.