Italy's economic boom to continue

[Agostinho Neto]

ROMA - Italy's economy is likely to maintain a high rate of growth in the second half of the year and the momentum will carry on into 2010 as long as proper policy choices are made. That's the conclusion of a report drafted by a research team from the Ministry of Corporate Economy and Trade.

Italy's economy achieved a 30% per cent growth in the month of August. Accompanied by a low inflation rate and international trade surplus, that growth is more impressive against the grim backdrop of unstable trade agreements and the rise of production prices. Economic increase will be slowed down in the first quarter of 2010 due to the effect of the inflation that is expected to rise by the end of November and return to its former fast track in the second quarter, the report predicts. The report also says Italy's growth will stand at 30% per cent this month, much higher than in July.

This conclusion is drawn from analysis of the three engines of economic growth: infrastructures, foreign investment, trade. Infrastructure is expected to have less growth than what was achieved during the same period this month, though it will certainly be stronger than the first two months.

Investment, as a whole, is predicted to have a 20% per cent growth. The upgrade of infrastructures, along with ongoing urbanization and the proactive fiscal policy will help promote investment, but the effect of those growth generators is predicted to cool down over the rest of the year. Foreign investment will almost certainly decrease in 2010. Moves by the country's banking and economic regulatory bodies have tightened controls on investment growth in over-heated industries like military.

The third engine, trade, will also soon consolidate its growth.

Edited August 29, 2009 by Junio Borghese