Picture used for illustrative purpose. File
Italy expects its coronavirus-hit economy to grow by more than 5% next year after shrinking 9% in 2020, two government sources told Reuters on Sunday.
In April, the government of the anti-establishment 5-Star Movement and the centre-left PD party forecast a fall in gross domestic product of 8% this year and a 2021 rebound of 4.7%.
The new forecasts, along with public finance projections, will be published next week, providing the framework for the 2021 budget which must be presented to the European Commission in mid-October.
The euro zone's third-largest economy has not seen annual growth of 5% for more than 40 years.
The new forecasts, which still need to be finalised, are based on an unchanged policy scenario. This means they do not incorporate planned expansionary measures to be financed by the European Union's Recovery Fund, the sources said.
The government estimates it will get some 209 billion euros ($247 billion) in cheap loans and grants by 2023 from the fund, designed to help the EU nations hardest hit by COVID-19.
Rome aims to present its so-called National Recovery and Resilience Plan, which will front-load the spending of up to 10% of this total, to the European Commission early next year, Economy Minister Roberto Gualtieri said last week.
Among a raft of projects under discussion, the government wants to create a national ultra-fast broadband network, upgrade its rail lines and spend more than 30 billion euros in six years to strengthen its healthcare system.
In a paper published this week, the government said Europe-funded reforms could help Italy double its growth rate, narrow its north-south divide and even increase its birth rate - one of the lowest in the world.
US and European shares advanced on Thursday as China struck a hopeful tone on trade relations with the United States and as Italy appeared close to forming a new government and resolving its political crisis.
Italy’s new government should not challenge European Union fiscal rules when it submits its draft 2020 budget to Brussels next month, the head of the eurozone finance ministers, Mario Centeno said.
The European Commission said Italy’s draft budget for next year could be in breach of European Union fiscal rules and it asked for clarification from the Italian government, in a letter sent to Finance Minister Roberto Gualtieri.
World stock markets declined further and oil headed for a double-digit weekly slide on Friday as jitters over a rising global COVID-19 infection rate and next week’s US presidential election more than offset strong euro zone quarterly growth data.
Dubai Electricity and Water Authority (Dewa) maintained its work progress at 100% without recording any electricity or water interruptions for all Dubai residents over the past few months.
According to the World Gold Council’s latest Gold Demand Trends report the global gold demand dropped by 19 per cent year-on-year to 892 tonnes in third quarter of 2020, as consumers continued to feel the impact of the COVID-19 pandemic.
The US economy grew at a record pace in the third quarter as the government injected more than $3 trillion worth of pandemic relief which fueled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal.