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BUSINESS AND MONEY

ECONOMY

Italian shopping boom fuels economic growth

The Bank of Italy on Friday forecast the country's gross domestic product (GDP), enhanced by a rise in domestic demand, will expand by 1.5 percent in 2016 and 2017, in line with government estimates, after rising 0.8 percent in 2015.

Italian shopping boom fuels economic growth
Eager shoppers queue outside a Gucci store in Rome. Photo: Andreas Solaro/AFP

“The recovery continues gradually. Export growth is gradually being substituted by domestic demand,” the Bank said.

The construction sector in particular, which was hit hard by the country's deep three-year recession, shows encouraging signs. The GDP contracted by 0.4 percent and 1.9 percent in 2014 and 2013 as Italy struggled to recover.

Despite the positive outlook, the Bank warned “significant risks remain” due particularly to “the possibility of a slowdown in emerging economies (which) may be more pronounced and longer lasting” than currently forecast.

The unemployment rate, which stood at 11.3 percent in November — the lowest level for the past three years — is expected to drop under the 11 percent mark by 2017, it said.

Increased demand and “labour cost reduction measures introduced by the government” should boost employment.

Inflation, which averaged 0.1 percent in 2016 according to official figures released Friday — its lowest level since 1959 — is expected to edge up to 0.3 percent in 2016 and 1.2 percent the following year, the Bank said.

MONEY

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.

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