The International Monetary Fund has cut its growth estimates for Italy. In 2011, Italy's GDP will grow by 0,8% (0,2 percentage points less than the June estimates) and by 0,7% in 2012 (in this case the drop is 0,6%). From Washington, the institute warns that in order to achieve the objective of a balanced budget in 2013, the Government must introduce new measures into the manoeuvre. "Italy's recent tightening - reads the IMF note - and the commitment to carry forward some of the fiscal consolidation measures launched in July are welcome but achieving a balanced budget in 2013 would require some additional measures .”
If most of the advanced economies and many of the emerging economies returned, as early as the first half of 2011, to production levels equal to those recorded before the crisis, "Italy and Spain continue to lag behind". For the Iberian country, the Fund estimates growth of 0,7% in 2011 (0,1 points less than those estimated in June) and 1,3% in 2012 (0,3 points less).
But pessimism affects all of Euroland (as also underlined by Jean Claude Trichet). The Monetary Fund forecasts a slowdown in growth in the Eurozone in 2011 to 1,9%, 0,1% less than the June forecasts, and 1,4% in 2012 (0,3% less) . Furthermore, France will grow by 2011% in 1,8 and by 2012% in 1,6 (-0,3 points for both years); the estimates for Germany remain unchanged in 2011 (+3,2%) but suffer a drop of 0,4 points in 2012, to +1,6%.
The Washington institute believes that in Europe there is still room to cut rates and that, "if the downside risks continue, the European Central Bank would have room to further ease its monetary policy". According to the Monetary Fund "it is important to keep interest rates at the current low levels, given that inflationary pressures are decreasing and the risks caused by tensions on sovereign debt and on the financial markets are increasing". Finally, the IMF stressed that the ECB must continue to intervene on secondary markets to curb the excessive volatility of sovereign debt securities.
