Italy's timid economic recovery hangs on vote result | The Daily Star
12:00 AM, February 27, 2018 / LAST MODIFIED: 11:55 PM, February 26, 2018

Italy's timid economic recovery hangs on vote result

The Italian economy is slowly making its way out of an economic crisis that has ravaged the country, but there are fears among the business community that the March 4 election could hobble what is a small and fragile recovery.

Figures from the national statistics body Istat say the eurozone's third largest economy recorded growth of 1.4 percent last year, the fastest rate in seven years.

However overall economic output is still nearly six percent lower than before the financial crisis hit in 2008 and Italy is way behind the 2.5 percent growth recorded by the eurozone last year, according to Eurostat.

Economists say this weakness is primarily due to Italian productivity being among the lowest in Europe, which in itself is due to factors like lack of credit, a mismatch between training and what companies need and a business environment that doesn't give entrepreneurs a helping hand.

"Since 1999, the productivity gap between Italy and the other major eurozone countries has widened significantly," says Nicola Nobile from Oxford Economics.

Gross domestic product (a measure of total output in the economy) "per hour of work is 25 percent lower than that of Germany and France."

If Made in Italy is a world leader in sectors like fashion and kitchen furnishings, it has nothing to do with the country's politicians, said Alessandro Iliprandi, chief executive of leather specialist Bonaudo. Italy accounts for 65 percent of European leather production.

"The political situation has been unstable for decades and politicians do not make the lives of entrepreneurs easier -- quite the opposite," he said.

For Iliprandi the obstacles that hamper everyday life are "the bureaucracy, the slowness of the justice system and the high taxes. To get out of this situation we need radical decisions to be made".

Centre-left governments led by Matteo Renzi and Paolo Gentiloni have made efforts to ease the frustrations of Italy's business class, and with some success.

Between 2012 and 2017, the country jumped from 87th to 46th in the World Bank's Ease of doing business index, but it remains behind the likes of Romania and Moldova.

The labour market has been made more flexible by the Jobs Act introduced by Renzi in 2014, which has made it easier to fire employees and created a new type of permanent contracts which increase protections for employees over the course of the contract.

Stay updated on the go with The Daily Star News App. Click here to download it for your device.

Grameenphone and Robi:
Type START <space> BR and send SMS it to 2222

Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News