domenica 18 maggio 2014

Renzi rules out corrective budget after growth setback

Renzi says his labour reforms important to boosting economy

(ANSA) - Rome, May 16 - Premier Matteo Renzi on Friday ruled out new budget measures in reaction to shocking economic figures one day earlier that showed the Italian economy was weaker than previously expected. "I exclude a corrective maneuver," said Renzi, adding that measures including tax cuts contained in his recent economic blueprint will provide the necessary boost to help stimulate growth in the struggling Italian economy. Many were surprised by Thursday's news that the Italian economy contracted unexpectedly in the first three months of the year, rather than showing the small measure of growth in its gross domestic product (GDP) that had been expected.

GDP dropped 0.1% between January and March, compared with the last three months of 2013, national statistical agency Istat reported in a new preliminary estimate. The figures were a major blow to Italy's hopes of seeing an economic recovery after it was previously thought to have emerged from its longest postwar recession. In a radio interview, Renzi said that further new corrective actions were not necessary and that he could see signs of an economic recovery on the horizon. "I remain optimistic - and this is not stupid optimism but optimism that takes reality into account - that we cannot say that the crisis is not over yet, but there are important signs of recovery".

Renzi's government also took further steps on Friday to shore up financial balance sheets by approving the terms for selling significant but still-minority stakes in the national postal service, PosteItalia, and Enav, the Italian air traffic control company, cabinet sources said. The sale of shares in the two agencies has been estimated to net as much as nine billion euros that could help pay government debt.

Meanwhile, investors on Friday began to recover from their shock and returned to the Milan stock exchange, where the FTSE Mib index ended 1.12% higher, erasing some of the previous day's losses when the market plunged by 3.61%, cutting away as much as 3.17 billion euros in value on the day. Bond yields also softened Friday and the spread between Italian bonds and their ultra-safe German counterparts, which widened dramatically to 184 points on Thursday, narrowed again to end the week at 173 points. That is still well above Wednesday's close of 154 points, which came before the shocking GDP news. 

Nessun commento:

Posta un commento