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(Bloomberg) –
Italy’s economy will recover stronger than expected in the third quarter after suffering one of Europe’s toughest blockades, Finance Minister Roberto Gualtieri said.
Production will exceed 9.5% under the government’s most recent monetary plan, Gualtieri said in an interview at the Ambrosetti Forum in Cernobbio, northern Italy, on Sunday, well above the median 7.9% of the forecast compiled through Bloomberg and would put the economy on a faster recovery path amid a smaller increase in new infections than its European peers.
“The emergency measures we took were designed to support the production system, employment and income,” Gualtieri said.”They were instrumental in allowing the Italian economy to restart, as is the case lately.”
Still, gross domestic product will return to its pre-coronavirus point until 2022, he added.
Gualtieri also revealed that an updated public finance plan to be presented in the coming weeks will set a “significant” long-term goal to reduce debt.Italy’s already heavy debt burden is expected to exceed 150% of gross domestic product after the pandemic.forced her to borrow one hundred billion euros ($118 billion) for emergency stimulus programs.
“We will provide at the end of September our budget document, which will have only a three-year horizon but also a longer-term horizon in which we will chart a trail of relief in our debt-to-GDP ratio that will be significant and sustainable,” he said.This can be achieved through medium-term fiscal measures and investments in production with EU stimulus funds, he said.
Prime Minister Giuseppe Conte’s government is under pressure to avoid focusing on jobs and protective companies to stimulate growth.Lately, projects are being presented for Italy’s expected share of EUR 209 billion in the EU stimulus fund.
While acknowledging that the Movements of the European Central Bank play a key role in controlling bond yields, Gualtieri that the strong foundations of the Italian economy and low personal debt also reduced spreads.The yield on 10-year bonds has fallen by more than half since the pandemic peak in mid-March.
Public participation
Gualtieri has rejected investors’ complaint about the relaunch of the great government in Italy.Conte and his ministers have veto power over foreign investment and intervened in sectors ranging from highways to broadband networks.
“The government is committed to addressing a number of issues that have been open for some time, with the prospect of forging market responses involving public and personal investment in infrastructure progression,” he said.
(Updates with more comments and background)
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