A recent surge in the government's
borrowing costs is a reflection of concerns about the growth of
the economy in the long term, Bank of Italy Governor Ignazio
Visco told the Financial Times in an interview published on
Sunday.
"I don't think it is speculation against the country. I think it
is basically a concern about . . . the long-term potential
growth rate of the economy," said Visco, who ends his mandate as
the head of Italy's central bank at the end of October.
Last week the yield on Italy's benchmark 10-year BTP bond yield
rose to almost 5% for the first time since Europe's sovereign
debt crisis from 2009 to 2012.
The paper also recalled how markets reacted badly when Rome in
its NADEF update to its DEF economic and financial blueprint
last month raised the country's planned fiscal deficit for this
year from 4.5% of GDP to 5.3% and for 2024 from 3.7% to 4.3%, as
well as revising downwards the growth forecast for both years.
Visco said these trends shows that investors "are insuring
themselves" against weak long-term growth prospects and high
debt.
There are a number of things Italy can do to bolster growth,
Visco told the Financial Times, such as supporting female
employment by
allowing children to be in school for the whole day, better
integrating immigrants into the workforce and improving training
in digital skills.
He also said the Bank of Italy was "not consulted" by the
government before it introduced the controversial windfall tax
on banks' extra profits, adding that the changes made to the
decree during its conversion into law by parliament "go in the
right direction".
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