Excluding the risk of contagion for Italy from the Greek crisis. But the risk of a substantial impact on our country may instead be real. The International Monetary Fund raises the alarm on the possibility that the difficult situation in Greece and between it and its creditors will also spread its shadow over Italy, marked by a "fragile and slow" recovery. If not countered with a strong political response from Europe – says the Fund in its update on article IV released today – “the adverse developments in Greece could have a substantial impact on Italy through effects on confidence, even if the direct exposure is limited", as are "the risks of contagion in the short term".
The IMF expects Italy's GDP to grow by 0,7% in 2015 and 1,2% in 2016. Italy's economic performance has been the weakest, he underlines, in the euro area since the crisis.
The Fund recognizes Prime Minister Matteo Renzi for having launched "an ambitious agenda to review the Italian economic and political system". And in particular it appreciates the introduction of the Jobs Act. "There is now a window of opportunity to be seized with deeper reforms to restart growth", concludes the Fund which encourages measures to improve the efficiency of the public sector.
The message coming from Washington essentially follows what was said last May at the end of the Fund team's mission to Italy. Italy must have a lighter public budget, reiterate the IMF economists, lightening the tax burden on capital and labor on the one hand, reducing public spending, starting with current spending, on the other.
The outlined macroeconomic picture, in line with the May data, estimates growth of 0,7% this year and 1,2% next year, penalized by the bottlenecks of the Italian system. Compared to the public finance estimates of the World Economic Outlook for April, the numbers of the deficit increase slightly, those of the debt decrease.
In detail, the 2015 deficit/GDP estimate rises to 2,7% from 2,6% in April, the 2016 estimate to 2,1% from 1,7%. The 2015 debt/GDP ratio drops to 133,3% from 133,8%, and that of 2016 to 132,1% from 132,9.
