Italy economy not back to pre-COVID level in 2022-EC

(ANSA) - ROME, NOV 5 - The Italian economy will not return to pre-COVID levels in 2022, the European Commission said in its upd ated economic forecasts Thursday.
    It said the economy is recovering from a steep virus-linked decline "but it is unlikely that the recovery will be sufficient to get production back to pre-pandemic levels by 2022".
    The EC said "Italy is recovering from a deep drop in production but the pandemic and its negative repercussions persist and weigh on economic activity, in particular on services.
    The Commission said Italian GDP will contract by 9.9% in 2020 and recover by 4.1% in 2021.
    These figures were down, respectively, from the 11.2% drop and 6.1% rebound the EC saw in July.
    The EC added that after a strong increase in 2020. Italy's budget deficit and public debt "will slow in 2021 and 2022".
    The deficit will rise to 10.8% of GDP in 2020 and fall to 7.8% in 2021.
    The debt will rise "sharply" from 134.7% in 2019 to 159.6% in 2020 before "slowly descending towards 159% in 2022 thanks to a growth in GDP".
    The EC added: "measures for liquidity to businesses, including state guarantees, imply some risks for the projection of the debt".
    The Italian unemployment rate will surge to 11.6% in 2021, the EC went on.
    The majority of job losses will be in the service sector, it said.
    Despite the new EU forecasts, the Milan bourse held up well and was showing a 1.8% rise by noon. (ANSA).