World Economy

Italy Growth Prospects Improve

Italy Growth Prospects ImproveItaly Growth Prospects Improve

The Italian government may raise its 2015 economic growth forecast after recent data showed a rise in job creation and a stronger economic outlook, Economy Minister Pier Carlo Padoan told Italian daily Il Messaggero.

Unemployment hit a two-year low of 12% in July and joblessness among those aged 15-24 dropped to 40.5% from a record 43.1% in June, data showed, Reuters reported.

On Tuesday, statistics bureau ISTAT revised up previous calculations for growth in the first half, a boost for Prime Minister Matteo Renzi’s bid to re-start an economy that has stagnated since Italy adopted the euro.

“We are working to update the (growth) forecasts in the government’s multi-year budget plan and ... we may record an improvement,” Padoan said.

The government’s estimate for gross domestic product to grow 0.7% this year looks within reach after growth for the first and second quarters was revised up to 0.4% and 0.35 respectively.

Padoan said employment had risen more than the government expected in July. Some 44,000 jobs were created, but that the fall in unemployment was also due to many people giving up looking for work.

The government plans to scrap taxes on primary residences from 2016, Padoan said, noting Italy was determined to discuss the issue with the European Commission.

“We expect attention and respect (from the Commission)”, Padoan said, pointing out that Italy is one of the few eurozone countries with a public deficit under the threshold of 3% of GDP.

Turning to the global economy, Padoan said there was little risk of contagion from a slowdown in China as long as Beijing made clear how it plans to manage the situation.

Padoan said it should not be taken for granted that the US Federal Reserve would decide to raise interest rates at a policy meeting on Sept. 16-17 as weaker Chinese growth would balance out “vitality” in the US economy.