Tuesday, May 17, 2016

Consumption driving the recovery, the GDP will grow by 1.1%. EU gets the go flexibility – The Republic

MILAN – The Mayor is in line with the European Commission and estimate for 2016 growth in gross domestic product Italian by 1.1% against 1.2% budgeted government in Def. But the Treasury collects especially the ok to the flexibility from Brussels, which will be formalized tomorrow with the opinions on public accounts of member countries.

The EU flexibility. The premier Matteo Renzi had anticipated since the morning the publication of the correspondence between the MEF and Brussels on the subject of the accounts: “We will be able to see recognized this element of flexibility that is different money,” he said. As reconstructed by Republic on newsstands, in fact it translates into a substantial grant for 2016 as long as you stay within the next two years too. In the afternoon, the Treasury has actually published on its website missives axis Rome-Europe : “The Commission in its letter announcing the intention of Italy to recognize the 2016 flexibility in the management the economic and financial planning of 0.85% of GDP, which allows the government to implement the adjustment path of public finances and at the same time to support the recovery and stimulate growth, a key condition for the reduction of the debt / GDP ratio “, wrote the MEF. It is therefore a ‘discount’ on budgetary correction in the order of 14 billion to apply to 2016.

For his part, the minister Pier Carlo Padoan “in his again confirms the commitment of the Italian government to fully implement with the next Stability law as provided in the last Def, so as to comply with the EU rules. ” In a nutshell, for 2017 and 2018 Italy has to avoid diverting too – even further – from targets. And just to avoid “significant departure” from the covenant signs of stability “The budgets proposed by Italy for 2017 reveals a difference between 0.15% and 0.25% of GDP,” the objective. “Addressing this is essential”, indicate the Commission Vice-President Dombrovkis and the Commissioner Moscovici . In essence, to achieve the 1.8% deficit / GDP in 2017 will serve further commitments 2.5000000000 to 3.4000000000. Again according to Prime Minister Renzi, the EU position “is an important fact, is a success of the whole country”, although “I wanted more flexibility.”

The recovery. returning to the relationship Istat, it is explained that the preliminary estimate of GDP for the first quarter 2016 (+ 0.3%) “has confirmed, albeit with moderate intensity, the continuation of the expansion phase of the Italian economy started at the beginning of ‘ the previous year. Some of the support growth factors such as low energy prices, the reduction of interest rates and the gradual improvement in confidence among operators are expected to produce their effects in the current year. ” Compared to estimates from November last year, however, new growth forecasts have been revised downwards by 0.3 percentage points. Overall, Istat said, the forecasting framework incorporates a more pronounced reduction of exports than imports.

Unemployment. A push to the increase in consumption will also decline from the unemployment rate expected to drop to 11.3% from 11.9% last year: according to Istat also the employment rate is expected to increase by 0.8% with the growth of economic activity. The Institute of Statistics points out the positive dynamics will still benefit of tax relief for new hires, although the amount has dropped by 8 thousand and EUR 3,250.

Inflation. L ‘turnaround on prices avverrò not until autumn: we have to wait the end of summer. according to ISTAT – to record the end of deflation and witness a weak growth. In April, despite the intervention of the ECB, prices fell by 0.5%: at present “the dynamics of prices should not deviate from the present up to the summer months, autumn would materialize a turnaround, which would bring the trend rate of more sustained values ​​towards the end of the year, although still less than 1% “. To keep prices anchored down is mainly the foreign component of the costs with energy products that would record a negative change in annual average also in 2016.

Investments. In 2016 consolidate the recovery in consumption and there will be a progressive increase in investment. According to ISTAT estimates, household spending in real terms is estimated to increase by 1.4%, fueled by the increase in disposable income and the improvement of labor market conditions. Investment is expected to recover instead of 2.7%, thanks to stronger than expected growth of the economy and improvement in credit market conditions.

The risks. The forecast of the Institute of Statistics, however, are not immune from downside risks that might depend above all by “a stronger slowdown of international trade and the possible resurgence of tensions in the financial markets”. In contrast, “a more pronounced recovery of the capital accumulation process, linked to the development of national and European policies, would be a further stimulus to economic growth.”

Airport taxes. “Intervene on airport charges. that we must have a strategic look: the grand hub can not be in all the provinces, the country must reduce the number of hubs but the reality Abruzzese has all the conditions to move forward and we hope that with is clear intervention on airport charges resolving the problems, “said the chairman of the board at TG8 Network 8 Abruzzo, responding to a question on the threat of Ryanair to leave small boats for dear taxes.

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