‘Italy has yet to emerge from recession’

The International Monetary Fund (IMF) says the Italian economy has yet to emerge from a prolonged recession as it is going to shrink for a third year running, and the public debt will continue to rise.

The Washington-based organization said in a report on Thursday that Italy’s gross domestic product (GDP) will fall this year by 0.1 percent following declines of 1.9 percent in 2013 and 2.4 percent in 2012.

The IMF further noted that Italy’s public debt, which is the second highest in the euro zone after Greece, will rise almost four points to 136.4 percent by the end of this year from 132.6 percent in 2013.

Italy’s GDP growth is expected to pick up to 1.1% next year as credit conditions normalize and easier measures announced by the European Central Bank to support the euro zone economy take effect.

Italian Economy Minister Pier Carlo Padoan told state broadcaster RAI in an interview on Tuesday that Italy’s economy may contract in 2014 for the third consecutive year.

“Gross domestic product might be negative this year,” Padoan said.

Earlier this week, the Organization for Economic Co-operation and Development (OECD) and Italian employers’ association Confindustria both forecast that Italy’s GDP would fall 0.4 percent this year compared with the government’s most recent official estimate of 0.8 percent growth.

The OECD also projected that next year Rome would see a growth of 0.1 percent, while Confindustria forecast a 0.5-percent expansion.

MP/MHB/MAM