The European Commission on
Tuesday cut its GDP growth estimates for Italy to 0.9% last
year, 0.1% this year and 0.7% in 2020.
This compared to 1%, 0.2% and 0.8% in February.
The EC said "weakness due to the contraction in the last half
of last year will be replaced by a slight recovery".
Consumer spending should be boosted by the government's new
basic income, the EC said, but a "deteriorating" labour market
will hit consumer spending by encouraging people to save money
rather than spend it, the EC added.
The European Commission said in its spring economic forecasts
that it sees Italy's deficit-to-GDP and debt-to-GDP ratios
rising sharply because of sluggish growth and the government's
fiscal policy.
"Subdued economic growth and fiscal loosening are expected to
affect public finances, with both government deficit and debt
projected to increase substantially," the Commission said.
It said it expects the deficit-to-GDP ratio to rise to 2.5%
in 2019 and 3.5% in 2020 in a forecast that does not contemplate
the activation of budget 'safeguard clauses' featuring hikes in
value-added tax if alternative forms of financial coverage
cannot be found.
The government has agreed with the EC to have a deficit of no
more than 2.04% this year. The EC sees the debt climbing to
133.7% of GDP this year and 135.2 next.
In the autumn its forecasts were 131% and 131.1% respectively.
Italy is last in Europe for growth, investment and jobs, the
European Commission said Tuesday.
GDP growth of 0.1% in 2019 puts it last in the EU, followed
by Germany with 0.5%, the EC said.
It is also the only country in the EU with negative
investments, 0.3% down on the previous year.
Employment is also negative in 2019, 0.1% down, again the
only drop in the EU.
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