The EU further scales down its growth estimates for Italy. According to the European Commission's winter economic forecasts, Italy will have GDP growth of just 2015% in 0,6, after a further slowdown in the last quarter of last year led to a drop of 0,5% for the whole of 2014: it will however be an expected return to the positive sign, in a context in which "for the first time since 2007, the economies of all the Member States are expected to start growing again".
Again according to the EU the Italian GDP should then increase by 1,3% in 2016, while as regards the public deficit, the Commission expects Italy to remain below the 3% of GDP bar, which was reached but not exceeded in 2014. In 2015 the projected deficit is 2,6% of GDP, and will fall further to 2% according to projections for 2016.
Il structural deficit, expected at 0,9% in 2014, should further decrease to 0,6% this year, while in 2016, according to the projections with unchanged policies, it would rise again to 0,8%. The debt, which reached 131,9% of GDP in 2014, will increase again this year, according to Commission forecasts, until it reaches a peak of 133%, before reversing the trend and returning, according to projections, to 131,9%. XNUMX% of GDP.
The commission also justified its conclusions: the timid rise in GDP will be "supported only slightly by an improvement in domestic demand, and will be mainly due to the increase in exports", which in turn will benefit from the fall in the euro, the improvement competitiveness due to the reduction in labor costs, and by the growth of external demand. Better results could then come "from a successful implementation of structural reforms and the Juncker Plan for investments", says the Commission, also recalling the probable benefits of Quantitative easing and the collapse in oil prices, while "a delay in the recovery of external demand”.
As regards the deficit, the deficit is expected to fall further to 2015% in 2,6 due to lower interest payments. Current expenditure will increase slightly mainly due to income support measures and the extension of support measures for the unemployed. “Despite the cut in the tax wedge, tax revenues are expected to increase mainly due to a recovery in revenues from corporate income tax and financial income tax”, argues the Commission.
As for the debt, according to the EU Executive, increased to 2014% of GDP in 132 because "the primary surplus was not sufficient to bring it down, also due to flat nominal growth and the payment of arrears" of the commercial debt of the Public Administration. However, the Commission concludes, the debt "should peak in 2015" with 133% of GDP, and then begin to decline in 2016, returning to 131,9 "thanks to stronger nominal growth and the primary surplus" .
Finally, according to the EU unemployment will remain at high levels in Italy in the current two-year period: at 12,8% this year, the same level as in 2014, and at 12,6% in 2016. Employment is expected to increase only slightly in 2015 and strengthen as the recovery gains momentum in 2016 – writes the Commission -. As more people enter the labor market, unemployment is expected to remain at historically high levels."
