Zero growth in 2014 as Renzi loses optimism

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"I am not optimistic,"Matteo Renzi said. Photo: Andreas Solaro/AFP
08:43 CEST+02:00
Italy's economy will register "around zero" growth over the course of 2014, Prime Minister Matteo Renzi admitted on Tuesday.

It was the first time that Italy's centre-left leader had put a figure on the likely impact of the economy slipping back into recession for the third time in less than a decade during the first two quarters of this year.

"I am not optimistic," Renzi said in a pre-recorded interview due to be broadcast on Tuesday evening. "We are expecting [a figure] more or less around zero.

"It is not enough to restart. It is the end of the fall but it is not a recovery."

The unexpected slowdown of Italy's economy over the first half of this year has cast doubt on whether Renzi can deliver on his promise to comply with the budget rules that apply to members of the eurozone while also boosting growth and reversing the upward trend in unemployment.

Renzi also used Tuesday's interview to welcome the recent downward trend of the euro, arguing that a fall to around $1.20 (from a 14-month low of around $1.29 in trading Tuesday) would make European exports more competitive.

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"For our companies, for our world, this would be a very, very important factor," Renzi added.

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