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Italy defiant after IMF slashes growth forecasts

The Italian government was defiant after IMF revised down GDP growth forecasts yesterday, saying Italy is a not a risk factor for the global economy - but the IMF's own policies are.

Published: 22 January 2019 12:56 CET
Italy defiant after IMF slashes growth forecasts
IMF Managing Director Christine Lagarde gives a press conference ahead of the World Economic Forum yesterday in Davos, Switzerland. Photo: Fabrice COFFRINI/AFP

The International Monetary Fund said it had revised down its 2019 GDP growth forecast for Italy 0.6 percent, down from the one percent it predicted in October

The prediction is in line with a similar reduction in forecast by the Bank of Italy last week.

“We have revised downwards our forecasts for advanced economies slightly, mainly due to downward revisions for the euro area,” the IMF said.

The IMF said Italy's financial situation was one of the biggest risk factors for the global economy.

“In Europe the Brexit cliffhanger continues, and the costly spillovers between sovereign and financial risk in Italy remain a threat,” the IMF said in an update of its World Economic Outlook.

READ ALSO: Italy must 'play by the rules' on budget: IMF chief

But the Italian government ministers hit back at the IMF's statement.

Italy is a not a risk factor for the global economy but the IMF's own policies are, Italy’s Finance Minister Giovanni Tria reportedly said.

Photo: AFP

His words were echoed by Italian Deputy Prime Minister and Interior Minister Matteo Salvini.

“Is Italy a threat and a risk for the global economy? On the contrary, the IMF is a threat to the worldwide economy, with its recent history of economic recipes featuring mistaken forecasts, few successes and many disasters,” Salvini told reporters in Rome.

Co- Deputy Prime Minister Luigi Di Maio said the International Monetary Fund's listing Italy and Brexit as global growth threats “does not discourage us” and there is “no turning back” on economic policy.

“The European Commission president has already replied to the IMF saying they were wrong to trust the IMF on Greece with austerity,” he said.

He said “there's no turning back” after the approval of the country’s new anti-austerity budget last week, which includes a revised welfare and pension system.

“We are creating a new welfare state: we're aren't turning back, vis-a-vis people who actually define Italy as one of the causes of the economic recession. We can't accept it…If they think they can discourage us with some figures they're wrong.”

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POLITICS

Italian PM Meloni’s ally gets EU Commission vice president job

EU chief Ursula von der Leyen on Tuesday named Raffaele Fitto, a member of PM Giorgia Meloni's Brothers of Italy party, executive vice president in the next European Commission, sparking concern among centre-left lawmakers.

Published: 17 September 2024 11:34 CEST
Italian PM Meloni's ally gets EU Commission vice president job

Fitto, 55, will be in charge of “cohesion and reforms” and become one of von der Leyen’s key lieutenants in the European Union’s executive body, despite concerns from EU lawmakers on the left and in the centre.

“He will be responsible for the portfolio dealing with cohesion policy, regional development and cities,” von der Leyen told a press conference.

Writing on X, Meloni called the choice of Fitto, a member of her Brothers of Italy party, “an important recognition that confirms the newfound central role of our nation in the EU”.

“Italy is finally back as a protagonist in Europe,” she added.

Currently Italy’s European affairs minister, Fitto knows Brussels well and is widely regarded as one of the more moderate faces of Meloni’s government.

But as a member of her party, which once called for Rome to leave the eurozone, his potential appointment to such a powerful post had sparked alarm ahead of von der Leyen’s official announcement.

Centrist French MEP Valerie Hayer described it as “untenable” and Fitto is likely to face a stormy confirmation hearing before the European Parliament.

“Italy is a very important country and one of our founding members, and this has to reflect in the choice,” von der Leyen said of his nomination.

READ ALSO: EU chief to hand economy vice-president job to Italian PM Meloni’s party

Fitto was elected three times to the European Parliament before joining Meloni’s administration in 2022, when was charged with managing Italy’s share of the EU’s vast post-Covid recovery plan.

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