Italy Other


Italy: New government pledges to ease austerity

May 2, 2013

On 28 April, Enrico Letta of the Democratic Party (PD) was sworn in as new Prime Minister, ending a two-month political stalemate in the wake of the 24/25 February general elections. Letta's government will be supported by a "grand coalition" formed by former Prime Minister Silvio Berlusconi's PDL party and Letta's Democratic Party (PD).

Markets cheered the end of the political impasse, prompting a decline in interest rates on Italian sovereign debt. The yield on Italy's 10-year bond dropped below the 4.00%-threshold to 3.97% on 29 April, the lowest rate in two and a half years. The spread against German Bunds eased to 276 points. FocusEconomics panellists expect the 10-year bond yield to rise to 4.60% by the end of the year before moderating to 4.35% in 2014.

Letta has pledged to relax the austerity drive and to push for measures to foster growth and employment, in cooperation with the country's European partners. In his first speech to the parliament, Letta proposed to suspend the controversial housing levy due in June and to freeze the VAT increase planned for July.

While not providing details on how to compensate for the lost revenue, Letta assured that the government will stick to its commitment to keep the budget deficit below 3.0% of GDP this year. FocusEconomics panellists consider the government's pledge credible and see a 2.3% of GDP shortfall for this year.

Author:, Head of Data Solutions

Sample Report

Looking for forecasts related to Other in Italy? Download a sample report now.


Italy Economic News

  • Italy: GDP growth revised downwards in Q3

    December 1, 2017

    Economic growth gained some traction in the third quarter on the back of strong investment and a robust external sector.

    Read more

  • Italy: Manufacturing sector at over six-and-a-half year high on booming new orders

    December 1, 2017

    The IHS Markit manufacturing Purchasing Managers’ Index (PMI) came in at a multi-year high of 58.3 in November, above October’s 57.8 reading.

    Read more

  • Italy: Inflation declines further in November

    November 30, 2017

    According to provisional data released by the National Statistical Institute (Istat) on 30 November, consumer prices dropped 0.2% on a monthly basis in November, matching October’s decrease.

    Read more

  • Italy: Consumer confidence weakens in November

    November 27, 2017

    The National Institute of Statistics’ (Istat) consumer confidence index declined to 114.3 points in November, down from October’s revised 116.0 points (previously reported: 116.1) and undershot market expectations of 116.4 points. November’s reading reflected a deterioration in consumers’ assessments of the current general economic situation as well as in their expectations about the future general economic situation.

    Read more

  • Italy: Business confidence slips in November

    November 27, 2017

    The National Institute of Statistics (Istat) composite business confidence indicator (IESE, Istat Economic Sentiment Indicator)—which covers the manufacturing, construction, services and retail sectors—slipped to 108.8 points in November, a slight decrease from October’s multi-year high of 109.1 points. The weakening came mainly on the back of a deterioration in sentiment on the retail trade sector, in which both the assessments on current sales and the expectations on future sales worsened.

    Read more

More news

Search form