Growth, IMF cut estimates on Italian GDP: “In 2016 a maximum of + 1%. On the banks need tighter supervision” – The Daily

The Brexit will have a negative impact on the recovery Italian, on which already weigh the high debt and the system problems bank ballasted by loans and which in some cases could serve “ recapitalizations precautionary.” A system which has, however, also needs a “ supervision more severe”. And ‘the framework outlined by Rishi Goyal , Head of Mission for Italy of the International Monetary Fund , which on July 19 will update accordingly chapter on the Peninsula in the World Economic outlook . The growth forecast for pil , in particular, will be cut in less than 1% in 2016 (previously 1.1%) and around 1% in 2017 compared to the previous 1.25%. The public debt that travels to 133% of GDP, after all, merely “the scope against shock.”

“The Italian economy is gradually recovering from a recession deep and protracted, “says the document, but the recovery remains” modest “and” could be prolonged and subject to hazards to the bottom “, including the volatility the financial markets, the crisis of refugees and headwinds from slowing global trade. So much so that, as already mentioned in the periodic report presented in May, “this growth path would involve a return to the production to pre-crisis (2007) only 2025 and widening of the gap on income with respect to

Among the progress the country has the Fund recognizes” the gradual improvement of conditions of the labor market “and” stabilization of loans bank to about 18% of all loans. ” However, the Italian banks “need resources,” admitted Goyal. That has not commented directly on the negotiations between Rome and Brussels about the Save of institutions with public money in the event of adverse circumstances but reminded that “ EU Directive the bail-in provides the flexibility to handle situations stress financial “with” recapitalizations temporary precautionary “. The point, in case serve resources, is “where these resources should get” and “the best solution” including in member countries, clarifies Goyal. “Italy is strongly committed” on this issue and its demands “are based on the existing framework legislation.”

In the meantime, the IMF urges “decisive steps” and between “a supervision tighter , a more rapid reduction of bad debts in the coming years, support emergencies of sound banking groups, address concerns on the setting of resolution “. “The financial sector is still subject to risks – adds the Fund – given that several banks could continue to find it difficult to generate sufficient profits to build up equity, dispose of non-performing loans and financing the credit. The buffer to fill these shocks are very limited. ” The Fund urges the need for “a broad framework that facilitates and supports the” sufferings of disposal strategies, “procedures for timely bank restructuring and defaults and a coordinated approach to strengthen the banking system.”

On the real economy facing “structural challenges remain significant”, “growth of the productivity and investment is low, the unemployment remains above 11%, with significantly higher levels in some regions and among the young “and” will go to 11.4% in 2016 and to 10.9% in 2017 “ and “the balance sheets of banks are weighed down by a very high level of pain and length of legal proceedings “. Finally, the debt, which is expected to decline “only gradually in coming years, and remain vulnerable to shocks,” says the Fund. From here the “urgency” of pro growth reforms, to continue the ‘ budgetary adjustment is distributed in a balanced way from 2017 to 2019, to implement a review of lower spending but more efficient a tax less distorting, including broadening the tax base and the ‘ introduction of modern tax on real estate . “The Italian authorities have launched a broad spectrum of important reforms, including institutional reforms , the pa , tax, of the labor market and the banking sector. And ‘imperative that these efforts are fully implemented and in-depth. “

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