Prime Minister Giorgia Meloni said she sees scope for Italy’s economy to grow faster than the European Union average this year, and looked forward to likely interest rate cuts.
The country’s first female premier, 46, spoke at a lengthy news conference Thursday, originally planned as an end-year event. It was twice delayed for health reasons.
“We don’t know how the economy will develop this year, growth will however be above the European average,” Meloni told reporters in Rome. She added on rate moves by the European Central Bank: “I trust that this year we can envisage a reduction of interest rates.”
Meloni has entered 2024 having escaped the threat of a downgrade of the country’s debt to junk, and with the spread between German and Italian bond yields close to the lowest since she took office. Italy has also avoided censure from the European Commission for loosening its fiscal stance, even as extra spending meant that its deficit as a percentage of gross domestic product won’t fall below the EU’s limit until 2026 — a year later than planned.
The European Commission, the EU’s executive arm, sees the bloc growing by 1.3 per cent this year, according to its most recent forecast. It predicts just 0.9 per cent growth for Italy.
The Bank of Italy has cut its growth forecast for the euro area’s third-biggest economy for next year due to tighter monetary and credit conditions for both families and companies.
Gross domestic product is expected to have risen 0.7 per cent in 2023 and just 0.6 per cent in 2024. That leaves Meloni struggling to find resources to keep promises to voters while at the same time continuing to reduce debt levels which are at a whopping 140 per cent of economic output.
Meloni defended a windfall tax on banks, saying her government was the first Italian one to tackle unfair margins. She faced a setback over her promise to raise €3 billion in fresh taxes from the banking industry after some of the country’s biggest lenders said they will avoid paying the levy.