IMF raises Italy’s 2015 growth forecast

The International Monetary Fund (IMF) on Monday upped Italy's 2015 growth forecast.

IMF raises Italy's 2015 growth forecast
The IMF has upped Italy’s growth forecast for 2015. Economy: Shutterstock

The IMF said the eurozone's third largest economy was now tipped to grow 0.7 percent this year, raising its initial forecast by 0.2 percent and bringing it into line with the government's official forecast.

The organization also raised its 2016 forecast from 1.1 percent to 1.2 percent.

The revised forecast came the same day Istat, the national statistics agency, announced that Italian exports were up by 9.2 percent in March compared to the same month in 2014, mostly driven by demand from outside the EU.  

However, the IMF said more needed to be done to tackle the country's towering unemployment and debt.

“Italy's economy is emerging slowly from a painful recession,” it said in a report, following the news this month that the country had finally rebooted its economy after nine months of recession and zero growth in the last quarter of 2014.

“Supported by stronger exports and higher spending by firms and consumers, growth is projected at 0.7 percent this year and 1.2 percent next year,” the IMF said.

“But much higher growth is needed to bring down unemployment and debt at a faster pace,” it added.

Italy's unemployment rate rose to 13 percent in March, with youth joblessness up to 43.1 percent — compared to a 22.7 percent rate in the eurozone.

Italy, which only this month emerged from the deepest recession since World War II, had pledged to lower its budget deficit from 3.0 percent to 2.6 percent of GDP in 2015.

But that promise could be hard to keep now that the government has been forced to pay out over €2 billion to pensioners following a court order.

The rebate, which will see over four million retirees receive €500 each on August 1st, will be funded by money originally set aside for measures to ease poverty. 

At the start of May, Italy's constitutional court overturned a key plank of the country's pension reforms, leaving the government facing a mammoth adjustment estimated by premier Matteo Renzi to total €18 billion.

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Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.