Venerdì, 21 Settembre 2018

Employers see recession dragging on till 4th quarter


(By Paul Virgo)
Rome, June 27 - Industrial employers' confederation
Confindustria said Thursday that it expected Italy's longest
recession in over 20 years to continue until the fourth quarter
as it painted a bleak picture of the country's economic plight.
Confindustria's research centre added in a report that
Italy had "touched the bottom" with the global economic crisis
in its sixth year.
It said it could only see "scattered evidence" of recovery
and forecast that Italy would post negative growth of 1.9% this
year, revising down its previous estimate of -1.1% for gross
domestic product (GDP).
The report said that it no longer expected the recession to
end in the summer, saying "a weak recovery" should start in the
fourth quarter.
It also revised down its growth forecast for 2014 from 0.6%
to 0.5%.
"In the sixth year of crisis, there are signs here and
there of the end of the fall and, more randomly, indications of
a turning point," the report said.
"There's a mixed bunch of scattered evidence that makes it
possible to perceive the start of the recovery, although this
does not represent a solid basis to forecast it".
Confindustria said on Thursday that around 700,000 people
have been put out of work since 2007, just before the start of
the global economic crisis.
It expects this figure to rise to 817,000 by the end of
next year.
It also forecast that unemployment will climb to 12.4% by
the end of this year and 12.7% by the end of 2014.
The report added that these figures would be 13.9% and 14%
respectively if the calculations include people idled after
being temporarily laid off by their firms.
National statistics agency Istat recently said that
unemployment in Italy has reached a record high of 12%, with
close to three million people out of work.
Confindustria also bemoaned the tax hikes former premier
Mario Monti's emergency technocrat administration introduced
last year as part of austerity measures to restore health to
Italy's public finances.
These further raised the country's already high tax burden
and contributed to deepening the recession.
"Tax pressure is reaching a historic high of 44.6% of GDP
in 2013 and it will remain unsustainably high in 2014," the
report said. Confindustria praised Premier Enrico Letta's
left-right administration, which replaced Monti's government in
April, for putting greater emphasis on promoting growth.
But the confederation's chief economist, Luca Paolazzi,
said the measures approved up to now were "very limited" and
that the government "lacked a plan" to combat the crisis.
Despite the administration's problems, Confindustria chief
Giorgio Squinzi warned that no one should try to cause trouble
for Letta's government.
Letta's executive is the fruit of an unprecedented alliance
between his centre-left Democratic Party (PD) and ex-premier
Silvio Berlusconi's centre-right People of Freedom (PdL) party.
The long-standing foes were forced together in April to end
two months of political deadlock after February's general
election failed to produce a clear winner.
But the partners have been bickering about several policy
The PdL has threatened to sink the government if it fails
to scrap an unpopular property tax called IMU and avert a
scheduled 1% rise on the top band of value added tax (VAT) - a
hike that on Wednesday the cabinet postponed until October to
buy time to find the money to avoid it all together.
Berlusconi's legal problems have heightened tension too,
after the three-time premier was handed a seven-year term in a
sex trial on Monday and failed in a bid to have the
Constitutional Court strike down a four-year fraud conviction
last week.
"We cannot miss the opportunity to have the government work
assiduously and serenely," said Squinzi.
"The government needs to have prospects of long-term
stability that give it time to prepare and consolidate a plan of
economic policy.
"This executive is the only solution possible. It's a
government of people of good will. It's moving in the right
direction, step by step".
Squinzi added that he was pleased about the package of
measures the government presented Wednesday to combat youth
unemployment by providing tax breaks for firms who hire
under-30s on permanent full-time contracts.
He also applauded the postponement in the rise in the top
band of VAT from 21% to 22%, while saying that the priority
should be for the government to beef up moves to pay
public-sector debts to private suppliers and to act to reduce
labour taxes.

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