European Central Bank (ECB) President Mario Draghi said Thursday that salary growth "well below the historic average" was one of the factors holding back inflation despite the ECB's efforts. He added that the low salary growth contributed to the under-use of production capacity. "This is why it remains essential to continue to support demand," he said in Frankfurt. Draghi said that the bank would not stop its efforts to boost inflation levels for the moment. "Despite the signs of improvement, it is clearly too early to declare victory," Draghi said. "The continuation of the support is necessary... We do not yet have sufficient evidence to significantly alter our assessment of the inflation prospects. "I don't see reason to deviate from the indications that we have given".
Italy's economic recovery risks being held back unless businesses' access to credit improves, the research centre of industrial employers' confederation Confindustria said Thursday.
"There has been a slow improvement in the economy for two years along with a strong contraction in credit to companies," read a Confindustria report ahead of the ECOFIN meeting in Malta. "The question is how long it can last". The report bemoaned a 2.2% fall in bank loans to businesses in 2016, while business loans granted by Italy's four biggest banks dropped 0.8%.
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