The OECD said Thursday that it has revised down its forecast for Italy's GDP growth this year from 1.4% to 1.2%, citing political uncertainty as a factor. It said in its interim economic outlook that "more moderate growth is probable in Italy, amid uncertainty about policy decisions.
"Higher interest rates and a slowdown in job creation are holding back consumer spending". The OECD's growth forecast for 2019 was unchanged at 1.1%.
OECD Chief Economist Laurence Boone called on the new 5-Star Movement-League executive not to reverse the economic reforms of the centre-left governments of recent years and the 2011 Fornero pension reform, which, among other things, raised the retirement age.
"We are sending a very simple message to Italy," Boone said.
"Many reforms were completed by the previous government... It is vital that these reforms continue (for Italy to) continue on the path of growth. "When we talk about pension reform, I think it's important not to undo the Fornero reform. "If it is a question of reducing the retirement age, we know that this does not create employment. Young people are not the ones who replace the old".
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