IMF raises Italy growth forecast

Emma Haslett
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The country's growth has been spurred by "strong policy actions", said the IMF (Source: Getty)

The International Monetary Fund (IMF) has raised its forecast for Italy's growth to 0.7 per cent this year, up from 0.5 per cent.

The organisation said Italy was "emerging slowly from a painful recession", but had been buoyed by the European Central Bank's (ECB) quantitative easing programme.

"Government bond yields have fallen to pre-crisis lows, despite the recent uptick, and bank and corporate funding costs have declined.

"Boosted by lower oil preces, a weaker euro, and recent reform efforts, confidence indicators have rebounded," it added. It also raised its growth expectations for next year to 1.2 per cent, from 1.1 per cent.

The organisation suggested Italy - once part of the slow-growing "PIIGS" group - had been helped by "strong policy actions".

"At the national level, Prime Minister Renzi’s government has advanced important institutional and economic reforms that have also lifted confidence.

"For instance, the Jobs Act will bring about significant changes to the labor market over time - by making workers more productive and easing their transition across firms andsectors. Tax simplification and judicial reform efforts will help support economic activity and strengthen competition.

"And a new law to convert the ten largest cooperative banks into joint stock companies has spurred expectations of better governance and efficiency gains in the sector."

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