World Economy

Italy Sees Modest GDP Gains

Italy Sees Modest GDP GainsItaly Sees Modest GDP Gains

The Bank of Italy said national GDP may post slight gains in the third quarter this year on a “moderate” economic recovery.

“After a flat performance in the second quarter (with respect to the first), GDP should register a slightly positive variation in the third quarter” as the country’s economic recovery continues “at a moderate pace”, the central bank said in an economic bulletin out Saturday, ANSA reported.

Premier Matteo Renzi’s government revised down its GDP forecast for 2016 to 0.8% from 1.2% after flat growth in the second quarter. “Investments have resumed but the growth is modest with respect to other eurozone countries,” the BoI bulletin said.

The central bank suggested government should “concentrate on measures to favor investments” and that coverage for such measures should be found by slashing administrative costs.

“A return to the pace of investment observed prior to the (economic) crisis (of 2008) would not only strengthen the cyclical recovery but also increase Italy’s potential growth by more than 0.5 of a percentage point,” the central bank said.

The BoI noted that the number of employed workers has returned to pre-crisis levels, with employees and the self-employed increasing by 0.7% and 1.2% respectively in the second quarter.

The central bank also said Italy’s massive public debt has dropped for the first time since December 2015, to €2.22 trillion ($2.24 trillion) in August, down by 30.9 billion on the record high reached in July.

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