Arab Today, arab today italy to start slow recovery in q4
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Arab Today, arab today
Arab Today, arab today

Italy to start slow recovery in Q4

Arab Today, arab today

Arab Today, arab today Italy to start slow recovery in Q4

Milan - XINHUA

A slow recovery is expected to start in recession-hit Italy from the last quarter of this year, according to the Bologna-based Prometeia think tank. Though Italian gross domestic product (GDP) will still fall by 1.8 percent in 2013, the last three months would start showing signs of recovery, Prometeia said in a report. The think tank expected Italy\'s GDP to increase by 0.8 percent in 2014, also thanks to a budget law which features a 27.3-billion-euro (about 37.3-billion-U.S. dollars) adjustment in public finances over the 2014-2016 period, and must be scrutinized and voted by parliament. Exports of goods should grow by 3.1 percent next year but they represent 24 percent of GDP thus will not be sufficient to sustain recovery alone, said Stefania Tomasini, an analyst responsible for the think tank\'s analysis and forecasts of Italian economy. Four or five \"delicate\" quarters lie ahead of the troubled economy, which is in its longest recession in more than 20 years, she said when presenting the think tank\'s figures at the Milan Foreign Press Association on Monday. Two \"tangles\" will especially influence the economic performance, the analyst added. First, the Italian government should ensure \"stability\" to allow loosening of fiscal policies that can stimulate internal demand. Secondly, Tomasini said the creation of common European banking supervisory mechanisms, or a Banking Union, will keep banks\' attention focused on their balance sheets in times of difficult access to credit for companies. She stressed, however, that 2014 will mark a step forward after two years of deep recession, while for the following years there would also be \"chances that growth resumes with a little more speed.\" Mechanics and fashion are among the industries that were hit by the global crisis but have already shown signals of recovery, while construction and related sectors will be hardly able to rise again due to an excessive growth in the past years that much be re-assimilated. Regarding Italy\'s massive debts, the report said it will increase to 134 percent of GDP next year. The placement of new public debt, however, will have to find space mainly in household portfolios or in foreign markets rather than in the banking system, which owns around 10 percent of public debt. According to Prometeia, household\'s disposable income will see a 1.2-percent yearly average growth in the 2014-2016 period, after six years of sharp decreases that have eroded spending power by 11 percent between 2007 and 2013. But the savings ratio has dropped to around 8-9 percent from 12-13 percent before the outbreak of the crisis. Thus consumes will have a hard time while families are struggling to recover the loss of savings and real wealth, and will start recovery only from 2015, the report said.

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