2023-08-02 20:01:53
“This is a nasty surprise for Meloni,” quotes the “Financial Times” (“FT”) Francesco Galietti from the Italian political consulting firm Policy Sonar. Italy’s head of government probably focused too much on the issue of inflation and “probably didn’t expect growth to lose momentum so quickly,” the FT continues.
According to preliminary figures from the statistics agency ISTAT, Italy’s GDP fell by 0.3 percent in the second quarter of 2023 compared to the first quarter. Analysts had expected stagnation on average. Compared to the same quarter of the previous year, GDP rose by 0.6 percent from April to June. There is no breakdown by sector in the GDP estimate published on Monday. However, ISTAT pointed to declining production in industry and agriculture.
Archyde.com Italy’s tourism industry is back to full swing
“Industry more important than tourism”
Above all, declining industrial production has long been considered a major problem child for Italy’s economy. This is also underpinned by the current index value on the mood in industry. According to ISTAT, this value fell to 99.3 points in July, from 100.2 points in the previous month. Analysts had expected an average index value of 99.8 points. Sentiment readings continue to point to weakness in Italian industry. The index value has fallen for the fourth month in a row.
From an observer’s point of view, the economy that shrank in the second quarter now also suggests that tourism, exports and the service sector, which has grown slightly, will probably not be enough to achieve the growth of 1.2 percent announced by the government for this year.
For an advanced industrial country like Italy, “the health of the economy is much more important than the tourism sector,” said the former chief economist at the Italian Ministry of Finance, Lorenzo Codogno, according to the online portal Euractiv. According to Euractiv, it remains to be seen whether the growth target is still “fully within reach”, as the Ministry of Finance has announced.
Sharp criticism from the opposition
They are “gloomy figures”, according to the “FT”, recalling Meloni’s announcements, with the fight once morest inflation maintaining the growth course and Italy’s debt burden (at 140 percent one of the highest in the EU, note) on a more sustainable basis want.
If the opposition has its way, the ISTAT growth figures raise serious questions regarding the country’s economic direction. “It is not an economic downturn or bad luck, but the result of this government’s blatant inability to manage economic processes and encourage investment,” the FT quoted MP Ubaldo Pagano of the Partito Democratico (PD, Democratic Party ).
Of course, the government doesn’t want to know anything regarding this – rather, factors that are beyond Rome’s control are the basis of the declining growth figures, as reported by the Ministry of Finance, according to media reports. A thorn in the side of the government in Rome is the repeated interest rate hikes by the European Central Bank (ECB).
Citizen’s allowance terminated by SMS
In addition to a clear growth course, the coalition in office since October 2022 and led by Meloni’s post-fascist Fratelli d’Italia (FdI, Brothers of Italy) also committed to extensive tax cuts and incentives for later retirement. In contrast to these election promises, Meloni’s government has recently tackled the also announced restriction of the basic income introduced by the populist Movimento 5 Stelle (M5S, Five Star Movement) in 2019.
IMAGO/ABACAPRESS/Fotogramma/Ipa/abaca Protest once morest the abolition of citizen’s income in Naples
Specifically, on Friday, 169,000 households were informed by SMS regarding the cancellation of the social assistance, known as citizen income. From now on, only households in which minors, people with disabilities or senior citizens older than 65 years live will receive the basic income.
According to observers, citizen income might be suspended for a further 80,000 households in late summer. The south of the country is particularly affected by the new measures. Naples is the city with the most recipients of citizen’s income. Unions and activist groups have called for protests once morest the cuts. In some cities in the south, people protested in front of the offices of the social security agency INPS.
Opposition politicians sharply criticized the government’s move. Ex-Prime Minister Giuseppe Conte, who introduced citizen income in 2019, described the step as an “ideological war” that would be fought on the backs of the weakest. Critics fear a “social catastrophe”.
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