The European Commission on
Thursday cut its growth forecasts for Italy from 0.4% to 0.3%
for this year and from 0.7% to 0.6% for next.
The previous forecasts were issued in November.
The EC said "the risks of further reductions in the growth
prospects remain pronounced".
It said "the investigation into businesses suggests a slow
start to 2020.
"Industry confidence improved in January, but still does not
suggest an imminent rebound in industrial production.
"The activity in services, albeit not immune from the weak
industrial cycle, should sustain the growth of real GDP in the
short term".
The EC added that the government's universal basic income, or
citizenship wage was buoying consumer spending and growth.
"Private consumer spending pushed by the new income should
sustain growth in the period of the forecast," it said.
"However, it is forecast that incomes will only rise
moderately, because it is likely that families will feel the
repercussions of the slowdown in the labour market, while it is
expected that the precautionary savings will remain high".
The Commission also said that "the provisional stabilisation
of manufacturing production, associated with the inversion of
the stocks cycle, together with the reduced domestic political
uncertainty and favourable credit conditions, are probable
factors in sustaining internal demand beyond the short term".
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