On Thursday 9 May, Italian Prime Minister Giuseppe Conte criticised the European Commission's “discouraging” assessment of Italy's economic and budgetary situation in the spring economic forecasts it presented earlier this week (see EUROPE 12249/6).
“It is the European Commission's analyses that are discouraging, not our economic figures”, he said on the margins of the European Summit in Sibiu on the future of the European Union Twenty-Seven (see EUROPE 12251/1).
Noting, on the contrary, encouraging signals in the first quarter with respect to “industrial production and unemployment”, Mr Conte considered the European Commission's view that the measures contained in Italy’s 2019 budget, particularly pension reform and the creation of a minimum income, will not produce any further growth in the next quarter to be “very pessimistic”.
Without a change in policy, the Commission expects GDP growth in Italy of 0.1% in 2019 and 0.7% in 2020. More importantly, Italy’s public deficit, which stood at -2.1% of GDP in 2018, may increase to -2.5% of GDP and to -3.5% in 2020. Rome has undertaken to take corrective measures, such as increasing VAT, if there is slippage in the deficit, which the Italians expect to reach 2.04% of GDP in 2019. Public debt may increase from 132.2% to 133.7% of GDP between 2018 and 2019, and then to 135.2% in 2020.
In June, after the European elections, the Commission will present its socio-economic policy recommendations for the euro area countries based on their national stability and growth programmes, which it was provided with at the end of April. (Original version in French by Mathieu Bion)