Italy’s employers’ union Confindustria cut down its estimate of the country’s economic growth this year and pressured Prime Minister Matteo Renzi to quickly intervene to boost growth in euro area’s third-largest economy.
Confindustria expects the economy to grow by 0.2 percent this year, compared to its previous estimate of 0.7 percent reported in December. The government forecasts output to increase by 0.8 percent, reported Reuters.
“The health of Italy’s economy remains fragile,” said Luca Paolazzi, the Confindustria’s chief economist. “The slow-growth sickness has not been cured and the patient is still weak.”
Renzi, who took over the reins in February, must turn around an economy that has stagnated for over a decade. Italy’s debt is valued over 2 trillion euros ($2.7 trillion), while youth unemployment has exceeded 40 percent. Confindustria predicts debt to stand at 135.9 percent of the gross domestic product this year, before declining to 135.1 percent in 2015.
The government targets to shrink the debt-to-GDP ratio to 134.9 percent in 2014 and to 133.3 percent next year.
Confindustria also expects the budget shortfall to amount at 2.9 percent in 2014, much higher than government’s target of 2.6 percent, before shrinking to 2.5 percent in 2015. The association says the economy expanded by 0.3 percent in this April-June quarter, up from 0.1 percent in the first three months of the year. It estimates that the economy will grow by 1 percent next year.
In a separate report, Thailand’s exports declined more than estimated in May. The exports tumbled down 2.14 percent from a year ago, reported the Commerce Ministry. The ministry blamed lower rubber and sugar prices, terming the factors as beyond its control.
Exports fell 1.22 percent from a year ago in the first five months of the year. Imports of capital goods, which includes computers, machinery and parts, declined 14.8 percent in May from a year ago. This compares favorably with a decline of 16.3 percent the previous month. Thailand imports the materials, assembles them into finished products, before shipping them out.
Thai economy fell 2.1 percent in the first quarter, weighed by weak demand and declining tourist numbers. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com