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News Analysis: Italy's economy sees a trickle of upbeat news
From:Xinhua  |  2020-01-11 07:08

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ROME, Jan. 10 (Xinhua) -- The latest round of economic indicators are showing positive signs for Italy's slow-growing economy -- but just barely.

Italy's National Statistics Institute (ISTAT) on Friday released new data on domestic industrial output for November and the overall economic situation improved in December. A day earlier, the institute reported that the overall employment rate improved to its lowest level since 1977.

However, none of the aforementioned figures improved by significant amounts.

The institute said that industrial production in November increased 0.1 percent compared to the previous month, reversing a trend that saw small decreases in production the previous three months. It also said the overall economic situation was "leaning toward" the worldwide trend for "moderate" economic growth.

The unemployment figure released Thursday told a similar tale: the number of Italians with a job climbed 0.1 percent in November compared to the previous month. Though the overall figure is the best in more than 40 years, the indicator had been hovering around that level for the last several months and economists said the number may have been inflated by some workers dropping out of the workforce.

"The latest economic news has mostly been good, but it's not overwhelming," Javier Noriega, chief economist with Hildebrandt and Ferrar in Milan, told Xinhua. "I look at the latest data as what could be the start of a fragile economic recovery."

Still, the recent figures are positive news for an economy dogged by slow economic growth, high unemployment levels for young workers, and a lack of investment in research and innovation. Tariffs on European goods entering the United States, and the trade war between some countries are also weighing on the prospects of economic recovery, analysts said.

"It's too early to tell if this is the start of something," ABS Securities analyst Oliviero Fiorini said in an interview.

"It's obviously better than the contrary, which would be a slightly negative trend in the indicators. But there's no reason to think the underlying situation in Italy has changed. The economy still needs major structural reforms and worries about political instability still cast a shadow over everything. We won't know what these newest indicators mean until we can look back in a few months."

According to Noriega, the economy is benefiting from some external factors "like a relatively weak euro that is helping exports and low yields on government debt that help save the government money."

"But until there is a government with a solid majority and a desire to push through the right kind of reforms, I worry these small steps are the best the economy can hope for," he said.

The consensus estimates are that when the final data for 2019 is tallied that the Italian economy will have grown around 0.1 percent for the year as a whole. But official data from ISTAT said it expects the economic growth rate to increase to around 0.6 percent for 2020.