Italy PANICS: Rome ‘to SLASH growth forecast for 2019 to just 0.1 percent’
The Italian Treasury will announce it expects the economy to expand by little over zero in 2019, Bloomberg reported, citing senior officials who referenced a draft report due for approval on 10 April. News of the lower growth forecast, which is down from a previous prediction for a 1 percent expansion, send the euro and Italian FTSE MIB lower. The single currency fell 0.19 percent against the US dollar to $1.1213. The euro is nearing the $1.1174 level reached on March 7, which if broken would send the currency to its weakest levels since June 2017.
As of just after 3pm UK time, the FTSE MIB is at 21,727, down 0.13 percent.
Bloomberg went on to report the Italian Government is targeting a deficit of 2.3 or 2.4 percent of gross domestic product (GDP), from a projected 2.04 percent previously forecast in its controversial budget.
The forecasts could still be revised before they are approved by the cabinet next week, the officials said.
Il Sole 24 Ore daily reported last week how Italian finance chiefs are hopeful a planned growth boosting package may lift this estimate to 0.2 percent.
A serious recession could be very damaging for these countries
David Lipton, IMF
The Italian economy has felt the brunt of a turbulent few months after plunging into recession territory following months of wrangling with the European Union (EU) over its budget.
Italy fell into recession after a second consecutive quarter of decline was recorded for the last three months of 2018.
The economy contracted by 0.2 percent in October to December of last year, after a decrease of 0.1 percent in July to September.
Rome was warned yesterday by David Lipton, deputy director general of the International Monetary Fund, that the nation could record a new contraction for the first quarter of 2019, deepening the woes of the economy.
Speaking in Lisbon, Portugal, Mr Lipton highlighted Italy as he spoke of the “glaring vulnerabilities” of some nations in the European Union which leave the bloc unprepared for future economic risks.
He said: “A serious recession could be very damaging for these countries, because they will be shown to be ill-prepared.
“Their weaknesses could present a serious setback for Europe’s goal of convergence of standards of living, productivity, of national well-being.”
Paolo Sestito, head of the Bank of Italy’s economic structure service, today warned Brexit will impact each country in the EU and prediction each nation “will receive a little less or will have to give more”.
He continued: “It will depend on the tariffs that will be applied between Great Britain and Europe.”
Source: Read Full Article