World News

Italy’s EconMin sees 6% fall in 2020 GDP as ‘realistic’ estimate

ROME (Reuters) – Italy’s Economy Minister Roberto Gualtieri said on Wednesday that the main business lobby’s forecast of a 6% fall in gross domestic product this year due to the coronavirus crisis is realistic.

On Tuesday national business association Confindustria said the outbreak would cause a serious recession in 2020.

“Unfortunately the estimates are realistic… at the same time we can say that (the Italian economy) can aim at a vigorous rebound,” Gualtieri told newspaper Il Fatto Quotidiano in an interview.

The government is not due to give its own estimates of the impact on the already fragile economy until the end of April, when it is scheduled to publish its Document of Economy and Finance (DEF).

Italy’s output rose 0.3% last year, and the government expected it to grow 0.6% this year, before the infectious disease emerged in the country at the end of February.

At the end of March, two sources told Reuters that the Treasury expected the economy to contract around 3% this year.

Gualtieri said a new stimulus package, set to be approved this month, would be “significantly larger” than the measures worth 25 billion euros passed in March and that it would be sufficient to support companies and households for the entire length of the coronavirus epidemic.

He said it would include an extension of state-backed guarantees for companies’ seeking liquidity, unemployment benefits and support to people on low incomes.

The minister also said the use of the European Stability Mechanism (ESM) to combat the crisis, under current conditions, was not an option and that, on top of the European Central Banks’ intervention, Europe needed to coordinate a shared fiscal policy.

“New solutions are need to grant parity of conditions and to define an adequate shared and responsible response,” he said.

(Reporting by Giulia Segreti; Editing by Shri Navaratnam and Andrew Heavens)