Saccomanni forecasts 1.1% GDP growth in 2014, higher in 2015
Bond spread to drop to 100 points by 2017, says minister30 October, 13:44
His forecasts came one day after the national statistical agency said the economy continued to slump in the third quarter - the ninth consecutive quarter of decline.
But Saccomanni seems unfazed, predicting GDP will rise in 2014 after more than two years of bitter recession, and "take on even higher levels in 2015".
He also forecast that the yield on Italy's benchmark 10-year bond will gradually decline, narrowing the spread between interest rates in Italy and its ultra-safe German counterpart to as low as 200 points next year.
That spread, which closed trading Tuesday at 240 basis points, has become a closely watched indicator of market confidence in prospects for Italy's economy.
"We confirm the prospects for recovery in economic activity in 2014…and it will take on even higher levels in 2015," Saccomanni said during a news conference marking World Savings Day.
Greater growth will boost market confidence and ensure that Italy will be moving towards a "gradual reduction," in the spread to 200 points in 2014 and as low as 100 basis point in 2017.
Meanwhile, Saccomanni acknowledged that he faces an extremely tough task trying to find room in Italy's budget to reduce employment taxes in an effort to stimulate economic growth.
"It's clear that there are no simple solutions to find more resources for…broader tax relief," he said.
Saccomanni also acknowledged calls for his resignation amid complaints that the latest budget bill does not do enough to lower taxes and stimulate growth, saying that it takes "enormous" courage to do his job.