Exports and investment to spur Italy’s growth

Italy’s economy is expected to return to growth this year and the recovery to strengthen in 2016 as external demand and exports pick up, according...

Italy's Economy

Italy’s economy is expected to return to growth this year and the recovery to strengthen in 2016 as external demand and exports pick up, according to the latest forecast from the European Commission (EC).

Italy’s economy growth by 0.6 percent in 2015

After contracting again in 2014, Italy’s economy will grow by 0.6 percent this year – slightly better than previously forecast – and will rise to 1.4 percent in 2016, the EC said on Tuesday.

Exports will be the main driver of the growth, aided by a weaker euro, with the pace of growth picking up in 2016 as Italy benefits from increasing external demand and investment.

The unemployment rate – which stood at 12.7 percent in February – is forecast to marginally decline in 2015 and stabilize in 2016.

Meanwhile, the pressure on labour costs will subside thanks to tax cuts included in Italy’s 2015 budget, while labour productivity is tipped to improve. Recent reforms are also appealing to foreign. Italy ranked 12th in the 2015 foreign direct investment confidence index by AT Kearney, the management consultancy firm, rising from 20th place last year.

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