ECB: Italian recovery will be challenging
Italy’s fiscal consolidation is riskier due to a worse macroeconomic evolution than expected as well as income slowdown and higher spending, the latest bulletin issued by the European Central Bank said.
The ECB report has praised Rome for having kept the deficit under 3% of GDP in 2012, but has warned against the high debt level and risks coming from an unstable macroeconomic scenario.
As the ECB bulletin also reported, the eurozone will end the year in recession with a GDP in contraction by 0.6%, but it will expand by 1.1% in 2014.
Despite the difficulties of its political and economic scenario, Italy joins Germany, Estonia, Luxembourg, Austria and Finland in the group of countries that have respected the EU stability pact by keeping the deficit below 3% of GDP.
However, Italy is also one of the five countries with a public debt higher than 100% of GDP and the ECB bulletin feared that it will reach a peak of 130% by the end of the year.