Homepage / Currency / Euro zone’s third largest economy is causing headaches for investors — and it might get a lot worse
1win официальный Сай Базовые правила и условия игры в kazino online на настоящие деньги Ana amaç çevrimiçi kumarhane 7slots: önemli avantajlar ve kategoriler Как начать игру в казино онлайн на настоящие деньги 1win Apk: Um Melhor Aplicativo Pra Jogos De Cassino Aqui No Brasil” 1win Apk: Um Melhor Aplicativo Pra Jogos De Cassino Aqui No Brasil” Mostbet Azerbaycan Rəsmi Casino Giriş Və Qeydiyyat Mostbet A Миссди Ххк Cassino Online Operating System Melhores Jogos At The Bônu 1win Mali Site Officiel des Paris Sportifs et Casino Inscription 1xbet Aviator How To Play The Aviartor Game On 1xbet In Nigeri прохода 1win Официальный Сайт Букмекерской Конторы же Казино 1ви Скачать Пин Ап Казино%3A Мобильное Приложение Pin Up Be Laurence Escalantes online casino empire feels heat of US lawsuits 1xbet Paid For Over $836, 000 To A Player From Africa Казино Покердом Играть Онлайн Бесплатно%2C официальный Сайт%2C Скачать Клиен Бесплатные Игры Казино Слоты И Игровые Автомат “казино Pin Up%3A находимся Вместе К вожделенной Мечте Ücretsiz Slot Oyunları Silvergames’te Çevrimiçi Oynayın Mostbet Bookie: Legjobb Szorzók És Élő Fogadási Élmény Online Mostbet Login To Your Online Casino Personal Account In Bangladesh! Top 10 Best Online Gambling Dens In 2024 Tested & Approve Powerful casino tactics in 2024: 7 vital methods for athletes Guide to Online Casinos in Canada “Online Kumarhane Oyna Çevrimiçi Kumarhane Nolimitwa Legalzoom Hisse Geri Alım Programını 75 Milyon Dolar Artırdı Yazar Investing Co Как играть в симуляторы в онлайн-казино Вавада Игровые Автоматы Демо Играть Бесплатно нет Регистраци Glory Casino: Top Online Casino Video Games In Banglades Рейтинг Надежных Онлайн Казино Лучшие Топ Клубы Росси Fortune Tiger Slot Review: Análise E Como Joga 1win Au Bénin: Une Revue Complète De La Plateforme De Paris En Lign Sledování Titulu Casino Suprême: Kde Sledovat What is a Data Room? Как Стать Стримером Казино%3F Что для Этого Нужно%3 Best Game Software How to Design Engaging and Effective Educational Events Winline Делает Разницу! Букмекерская Контора Winline Онлайн Ставки На Спорт Making Corporate Travel Arrangements Business Virtual Data Room Stock Market Tips For Beginners What to Look for in a VDR Provider Why You Need a Secure Data Room Learning in the Digital Age How to Apply For Business Loans VDR and Document Management Performance Management and HR Outsourcing Modern Business Integration How to Choose the Right Board Portal Software for Your Company How to Choose a Data Storage Room Why Startups Use a Data Room for Investors The Best Web Tools for Designers Use Cases For Using VDR Documents Subsidy Programs and Financing Innovative Technologies for Audit What Is Real Estate Management? Investment and Funds Inspiring Teaching Books What Are the Benefits of a Virtual Data Room? Startups and Business Ideas How to Improve Virtual Board Communication The Lego Company History Investing in the Biotech Industry Financial Startup Basics Jogue Por Dinheiro Actual Em Cassino Onlin Virtual Communication Methods for Remote Leaders How to Choose the Best VDR Providers How Successful Online Businesses Succeed How Business Experts Fuel Innovation and Create Competitive Edge The IT World and Business Deal Making Software and How it Can Help Your Business Virtual Data Room Software Types of Steel Materials and Their Uses Board of Directors Software Bonver Casino Cz Hrací Automaty S Bonusem Zdarm Magazyn Żużel Speedway W Polsce I Na Świeci What Is Logistics School? What Is the VDR for Acquisition? The Best Data Room Apps For Startups Best Practices for Creating an Effective Board Meeting Agenda How to Choose the Best Shareholders Online Platforms Ostdeutsche Biersorten Getting a Construction Management Degree How to Select an Online Data Room Provider Start Your Blog Without Investment What to Look for in a Board Room Provider Data Room Comparison – Which Data Room Is Right For Your Business? Zakłady Sportowe Online Autógrafo Bukmacherska 1xbe “Pin-up O Melhor Cassino Do Brasil Web Site Oficial ᐈ Jogar Caça-níquei Rotating Events in Our Time How to Choose the Best Business Software Choosing an Online Payment Processor Due Diligence Software Virtual Data Room Providers for M&A Due Diligence The Best Online Data Room Benefits of a Due Diligence Data Room Best Practices for Data Rooms Types of Corporate Governance What Is Virtual Data Storage? Benefits of Document Distribution Software The Benefits of a Data Room for Startups

Currency, United States Finance

Euro zone’s third largest economy is causing headaches for investors — and it might get a lot worse

When most of the euro zone seems to be flourishing, its third largest economy remains a major headache.

Italy is dubbed by many analysts as the biggest threat to the stability of the euro zone economy, even though recent data have come in above forecasts.

“Italy’s GDP (gross domestic product) year-on-year percentage change is only half of the euro zone average,” Marco Wagner, senior economist at Commerzbank in Germany told CNBC in an email. “This shall remain so for the time being,” he added.

The Italian economy is set to rise 0.9 percent this year and 1.1 percent in 2018, according to forecasts by the European Commission. The euro zone grew at a pace of 2.1 percent year-on-year in the second quarter of this year from 1.9 percent in the first quarter, figures from the EU’s statistical office showed earlier this month.

However, recent Italian data has positively surprised analysts: Unemployment has fallen 0.7 percent in the first half of the year, youth unemployment fell to about 35 percent, a services sector index reached its highest level in a decade and three troubled banks have been rescued, easing concerns over the banking sector.

“The recovery is expected to continue, but risks ahead are significant,” the International Monetary Fund (IMF) said at the end of July. The Fund revised upwards its forecasts for Italian growth this year, but warned that the “downside risks are significant.”

These include “political uncertainties, possible setbacks to the reform process, financial fragilities, and re-evaluation of credit risk during monetary policy normalization,” the IMF said.

Erik Jones, professor of International Political Economy at Johns Hopkins University, cited the same reasons driving concerns about Italy.

“There’s a giant amount of non-performing loans (NPLs),” he said. “The economic recovery is taking place but at a really slow pace … (And) there’s political risks in the horizon with the upcoming general election,” he added.

According to figures from the IMF, Italy’s NPL levels stood at 356 billion euros at the end of June of last year, corresponding to 18 percent of total loans for Italian banks, equivalent to 20 percent of Italy’s GDP and one-third of the euro area total for NPLs. The figures have come down since the height of the crisis but they still call for additional measures, the Fund said.

High levels of bad loans constrain banks’ ability to lend and can divert funds away from more productive parts of the economy. This can be a particular problem for an indebted country like Italy. Public debt is seen at 133 percent of GDP this year and at 131.6 percent in 2018, according to IMF forecasts. If the country doesn’t take measures to address this high pile of debt, then Italy could become a bigger problem when the European Central Bank (ECB) begins to raise interest rates, as markets expect.

“At some point in the future the ECB will raise rates, which question the sustainability of Italy’s debt,” Jones from Johns Hopkins told CNBC over the phone.

Higher interest rates will mean higher rates for borrowers across the spectrum in Italy, increasing the chances of any defaults on car loans, bank loans, mortgages, and so on.

The general election, due next year, is another concern looming over Italy.

Opinion polls show that political parties with Euroskeptic views represent the majority of the voting intentions, a chart compiled by Commerzbank showed.

This makes any possible governing coalition unclear, Jones explained.

“Italy has started to grow again in recent years. But the recovery has been too weak to help claw back the ground lost from subpar growth that started well before, and was exacerbated by, the global financial crisis,” the IMF said last month.

The Fund suggested more public investment, better targeting resources to the most vulnerable, lower pension spending, lower tax rates on labor, and bringing more enterprises and persons into the tax net as the next steps forward.

Source: cnbc
Euro zone’s third largest economy is causing headaches for investors — and it might get a lot worse

Comments are closed.