PARIS – The Oecd cut its growth forecast for Italy (0.2% this year and 0.6% the next, with an increase of Gdp of 0.8% in both cases), but stands firmly on the side of the premier Matteo Renzi in the battle with Brussels on the flexibility of the financial statements.
In the Economic Outlook mid-term (intermediate, that is, compared to those with the most extensive and articulated of June and September), the organization of the parisian highlights once again the persistence of a "growth spring" at the global level, with a revision of the estimates, which practically does not save anyone.
Compared to June, the overall growth is adjusted downward by 0.1% (to 2.9% in 2016 and 3.2% in 2017), with a cut on this year to be most pronounced for the United States (down 0.4% to 1.4%) and Canada (down 0.5% to 1.2%). The reduction for the euro area was 0.1% (1.5%).
The Oecd has lowered its estimates on Italy. “Slow global growth, Europe’s vulnerable”
The positive sign remains only for the Uk (+0.1% to 1.8%), and, at least for this year should be affected by less than expected of the effect a Brexit, and for Brazil (+1%), but remains in deep recession (-3,3%).
As for the next year, in positive territory there are only Japan (+0.3% to 0.7%) and Brazil (+1.4% to -0,3%), with the eurozone decreased by 0.3% (1.4%).
And if, for Italy, the decline this year is in line with the general, in 2017 the shear is the strongest, with the sole exception of the Uk (-1% to 1%), which will begin to be affected by the fully of the outcome of the referendum.
The drastic revision of the estimates on Italy, according to the chief economist of the Oecd Catherine Mann, is due in part to the impact of less positive than expected in the reforms and in part to the fact that our Country, mainly due to the composition of its exports, is more exposed to the overall performance of the eurozone and the consequences of Brexit.
“The general context, he explained, the Mann – effect is all the more important for Italy than for other Countries. With regard also to the domestic situation, Italy has a wide range of challenges. There have been important advances, for example with the reform of the work that has had a positive impact on employment, but the hope that this positive momentum to continue and even broaden was disappointed. There are issues of trust, are also linked to the political uncertainty due to the upcoming referendum. Investment, finally, show a trend of less positive than expected”.
"The labour reform has had a positive impact on employment, but the hope that this momentum to continue and even broaden was disappointed"
Catherine Mann, chief economist of the Oecd,
On the other hand, the Oecd puts the foot in the pot with the question of "flexibility", to break a lance in favor of the Italian positions: “The application of the rules of the stability Pact – writes and reiterates in the press conference Mann – should be changed to allow for fiscal policies to be more targeted to support growth. For example, excluding investment from the budget. And, more generally, by adopting a consistent approach in the show more discretion”.
Mann stresses that the persistence of exceptionally low rates – despite having potentially dangerous consequences on the balance of the financial markets, such as demonstrates, however, the performance of bank stocks – a free resources that can be used to support the growth, particularly on public investment in infrastructure and education. And Italy, being the Country that has most benefited from the low interest rates, is therefore also the one that could, in the face of more flexible rules from the european Commission, to use more resources to strengthen a growth that is hard to get.
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