Italy’s current economic situation is “delicate” and must be carefully monitored, according to the European Union economics commissioner Pierre Moscovici.
The EUR/USD is currently trading above 1.1200 after German industrial output increased by 0.7%, coming in just above expectations.
Moscovici was reported by Reuters this morning as saying that “Italy is in a very delicate growth situation.”
The nation has the third-largest economy in the Eurozone and its huge public debt threatens the region.
It began the year by slipping into its third recession in a decade. Italy suffers from high unemployment rates, particularly among its youth.
Mosovici referred to non-EU figures that indicate no growth or even a recession for the nation, revealing that “these are figures that we need to follow very closely.” Latest approximations issued in February predicted a 0.2% growth for the nation’s economy in 2019.
He said that the Commission is set to reveal new economic forecasts on May 7.
“Italy is in a special situation because it is a country with a very high debt level and it is critical that debt does not start growing again,” Moscovici announced at a news conference earlier this year in February.
Italy’s huge public debt is only being exacerbated by the policies of its populist government.
In an unprecedented stand off with the EU, the European Commission rejected Italy’s original 2019 budget last October. Its over ambitious proposal was deemed controversial because it breached EU rules on government borrowing. It was only in December that Italy’s populists came to an agreement with the European Commission over the 2019 budget, having reduced its original deficit target.
Recently, Bloomberg reported that the Italian Treasury is set to cut its growth forecast for 2019 and raise its projected budget deficit. The news was delivered by two senior officials with knowledge of the draft outlook.
