GDP down 2% in 2013, says Bank of Italy

Ignazio Visco says GDP expected to grow 0.5% in 2014

GDP down 2% in 2013, says Bank of Italy

Rome, July 10 - Italy's gross domestic product (GDP) in 2013 ''is expected to drop around two percentage points'', Bank of Italy Governor Ignazio Visco on Wednesday told an assembly of the Italian Banking Association ABI. ''Economic activity should return to expand at a moderate rate by the end of the year with growth over half a percentage point''. Visco also warned the annual gathering that ''margins of uncertainty are high: the risks of a slowdown of the world economy, in emerging economies in particular, are weighing on the timing and intensity of recovery''. The Italian economy is going through ''a difficult transition'', the Bank of Italy chief said. ''Overcoming it successfully requires an effort from all. The banking system must play its part''. In particular, Visco warned ABI representatives that no lasting economic recovery could be expected ''without sufficient financial support to companies''. The Italian economic situation ''is difficult'', he said, but the outlook is positive as stressed ''by a number of international organizations including, yesterday, the IMF'', International Monetary Fund. On Tuesday the International Monetary Fund (IMF) said Italian GDP will fall 1.8% in 2013 but rise 0.7% in 2014. The 2013 forecast was 0.3% lower and the 2014 forecast 0.2% higher than April forecasts. The same day however Standard & Poor's cut its rating for Italy down to BBB from BBB+ with a negative outlook. In a statement, the ratings agency said the Italian economy will contract by 1.9% in 2013, with a debt-to-GDP ratio of 129%. (photo: Bank of Italy Governor Ignazio Visco)

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