CERNOBBIO: The Italian government will confirm an economic growth forecast of 1 percent for 2017 and revive its privatisation programme next week when it publishes a new multi-year fiscal plan, junior Economy Minister Enrico Morando said on Saturday.
Morando said at the Ambrosetti workshop in Cernobbio that Rome would indicate a falling trend for its huge public debt starting from 2018, after it had risen for ten years in a row.
Italy’s gross domestic product rose 0.9 percent in 2016, compared with 0.8 percent growth in 2015 and business confidence has improved steadily in recent months, with surveys of purchasing managers pointing to accelerating activity.
This has raised expectations that the Treasury may lift Italy’s growth forecast for this year, which it said last year would be 1 percent, in its Economic and Financial Document.
The multi-year fiscal plan will include a commitment by the government to restart its privatisation programme in 2017, after it postponed the sales of several state-owned assets last year. This will allow the government to raise funds to reduce its public debt, according to the junior minister.
“The Economic and Financial document will indicate a falling trend for public debt starting from 2018,” Morando said, adding this would be based on a commitment to sell enough assets to deliver proceeds of between 0.3 and 0.4 percentage points of Italy’s gross domestic product this year.
In late 2015, then-Prime Minister Matteo Renzi said the debt would come down the following year for the first time in eight years, thanks partly to privatisations worth 0.5 percent of GDP.
But the state managed to sell less than a fifth of its targeted amount and the national debt rose to a new high of almost 133 percent of GDP, the highest ratio in the euro zone after Greece.
Morando said that state fund Cassa Depositi e Prestiti (CDP) may play a role in the next phase of the privatisations, adding that oil major Eni utility Enel and national post office Poste Italiane would likely be involved.
Italian newspapers have reported that the government could sell its stakes in these and other state-controlled companies to CDP by the end of this year as a way to cut its debt.