Economic growth in Italy remains
"fragile," cautioned business group Confcommercio on Thursday
even as Confindustria, representing major employers, expressed
optimism for a slow but encouraging expansion.
Even as the two bodies differed slightly on the pace of
growth in the longsuffering Italian economy, both agreed on the
need for more business tax cuts which they say would boost
productivity.
That is something that Premier Matteo Renzi has promised,
pledging a total of about 50 billion euros in tax cuts over five
years, starting with measures he introduced last year.
Researchers at the Confindustria study centre said that
they expect GDP expansion this year to meet and maybe exceed
their forecasts made last month of a 0.8% pace of GDP growth
this year, rising in 2016 to 1.4% growth.
"The recent progress...is in line with or even higher
than that indicated by the study centre," researchers said in a
monthly update.
It acknowledged that is still a slow pace, although the
Confindustria estimates are in line with increased forecasts
last week from the Bank of Italy which included a 0.7% growth
rate this year and rising to 1.5% in 2016.
This was an improvement over the central bank's previous
outlook for GDP growth of 0.4% in 2015 and 1.2% next year.
outlook.
It is also similar to forecasts earlier in July from the
Organization for Economic Cooperation and Development (OECD)
which said that Italy's GDP will rise by 0.6% in 2015 and 1.5%
in 2016 - "in both cases, below the growth forecast for the
eurozone and the OECD as a whole," the agency said.
While many Italians may feel encouraged by signs of some
sort of economic growth after its longest recession since the
Second World War, the country is not assured of a full recovery,
warned Confcommercio, which represents a range of independent
Italian businesses.
Italy's economic recovery remains "too fragile," its chief
Carlo Sangalli said Thursday.
"Today, we are certainly facing the fact that there is a
recovery, but it is still too fragile, timid, uncertain," said
Sangalli.
"We have to take advantage of every opportunity to make
2015 the year of recovery," Sangalli added.
On Wednesday, Confcommercio released a study of spending by
local governments, which said that almost 23 billion euros in
taxes were being wasted and could be cut.
Other wasted tax dollars could be reallocated for better
use, such as infrastructure investments but also tax cuts,
according to Confcommercio.
Lower business taxes would boost business competitiveness
and help the economy, Confindustria said in its report on
Thursday.
"The priorities for Italy," must include tax cuts as part
of broader structural reforms, the group said.
As well, efforts to increase employment will boost
consumer confidence and improve their spending power, essential
to economic expansion.
Renzi's tax cut measures include last year's reduction in
the IRAP regional business tax as well giving low-income
families an 80 euro monthly bonus.
He also suggested a reduction in the corporate income tax
(IRES) would be coming in 2017.
That is all part of a "radical process of modernization of
the country (that) must create wealth and jobs after years of
crisis," said Economy Minister Pier Carlo Padoan.
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