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ECONOMY

IMF increases its growth forecast for Italy

The International Monetary Fund (IMF) on Monday increased its 2017 growth forecast for Italy to 1.3 percent from the previously more modest 0.8 percent.

IMF increases its growth forecast for Italy
File photo: riverlim/Depositphotos

But Italy's GDP growth will slow through 2018-2020 to reach 1 percent, the IMF said in its report following an annual mission to the country.

The Italian government itself has cautiously forecast growth of 1.1 percent in 2017 and 1 percent next year. Italy's economic growth remains one of the weakest in the European Union, according to the IMF.

ANALYSIS: Why Italy is still Europe's poor relation

“Weak productivity and low aggregate investment remain key challenges for faster growth, held back by structural weaknesses, high public debt, and impaired bank balance sheets,” it said.

The IMF called on Italy to accelerate the process of cleaning up the banking sector, weighed down by dodgy debt made up of loans which risk never being paid back.

These amount to some 350 billion euros gross, one of the highest levels ever in the eurozone.

Italy is currently being run by caretaker Prime Minister Paolo Gentiloni and the uncertainty over what comes next is seen as dampening an economy saddled with unemployment over 11.5 percent of the workforce.

While the made-in-Italy brand is as strong as ever in fashion-related luxury and food and drink, in other sectors the country is suffering from declining competitiveness while international rivals forge ahead on that front.

A snail-paced legal system and mountains of red tape are also long-established complaints of the Italian business community.

READ ALSO: Italy mulls plan to scrap one- and two-cent coinsItaly mulls plan to scrap one- and two-cent coinsFile photo: macniak/Depositphotos


 

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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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