The recovery in Italy and the
eurozone is gradually proceeding but there remain "significant
risks, among which there are major ones linked to the
international situation, which have returned to the fore in the
last few weeks", the Bank of Italy said Friday.
The central bank's economic bulletin highlighted "the
possibility of a slowdown in emerging economies that could prove
to be more marked and lasting than thus far hypothesised and
have strong repercussions on financial and currency markets".
But the Bank of Italy said 2016 budget measures were
driving investments and it confirmed its October forecasts of
GDP growth of 1.5% this year and next.
The 2016 budget's stimulus measures should boost
investments starting in the first quarter, the Bank of Italy
said.
The central bank said investment in construction would help
the accumulation of capital.
It said the assessments of households and business about
the economy "remain favourable".
GDP will rise 1.5% in both 2016 and 2017 after last year's
gain of 0.8%, the Bank of Italy said, confirming October
forecasts.
"The recovery is proceeding gradually," it said.
The fourth quarter of last year likely saw the same 0.2%
increase as the third, it said in its economic bulletin, adding
that the European Central Bank was also helping the economic
recovery.
The bank also said credit conditions were improving and
employment was being boosted by the Job Act labour reform and
tax breaks for new hires.
It said firms were expressing "cautious optimism" about
hiring.
Consumer spending was set to rise after the abolition of
the TASI property tax, the central bank added.
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