The Italian economy will return to growth next year as external demand begins to offset the effects of the global financial crisis, According to the Arrigo Sadun, executive director for IMF for Italy.
"The country's economy has entered into recession, as the global financial crisis and ensuing slowdown intensified," the IMF report stated. It continued, "The recovery is likely to be slow and weak, reflecting underlying structural rigidities, lack of domestic competition, and the limited scope for a fiscal response."
Speaking to news agency AGI, however, Sadun pointed out that the more positive elements of the Fund’s report that the country's banking system remains solid, and its property market, while gently declining, is holding up.
"Although the global crisis is serious and intensify every day, for Italy, several elements are less dramatic than for other countries," Sadun said. "There is a growth problem, which is in common with other countries, but no financial market implosion, nor a collapse of the property market." Bearing this in mind, Sadun believes that Italy has a good chance of making a quick, if gradual, recovery from the global economic crisis as early as next year.
GDP will shrink 4.9 percent in 2009, employers lobby Confindustria said in a report in Rome, revising its March forecast of a 3.5 percent contraction. They predict that the economy will expand 0.7 percent next year. "The very deep economic fall in the first quarter of 2009 has eased in the second quarter. The recovery in exports and stocks will guide Italy's exit from the crisis in the coming months", Confindustria said in the report.
Meanwhile, the new estimate from Confindustria compares with projection by the Organization for Economic Cooperation and Development (OECD) and it forecasts 0.4 percent growth next year and added that Italy will record "a very slow return to positive growth during 2010," the OECD said.
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