After zero growth in 2005, Italy's economy should pick up in the first half of the current year thanks to a general recovery in the euro zone, according to the Organization for Economic Cooperation and Development.
Italy's GDP, the OECD explained, is expected to rise by 0.4% in the first quarter of 2006 and by 0.3% in the second, over the respective periods last year. The euro zone's growth rate for the first half of 2006 is expected to be some 1.5% over the same period in 2005, OECD added.
The OECD data was presented to the press here by the organisation's chief economist, Jean-Philippe Cotis, who observed that Italy's economy was being held back by its lack of competitiveness.
Economic growth in the euro zone, he added, will depend on the trends in oil prices, the current accounts of some member states and the real estate market. Any further hike in interest rates by the European Central bank, he added, "must be based on clear, unequivocal signs" of an economic recovery and a real threat of inflation rising.
Italy's national statistics bureau Istat reported last week that GDP did not expand in 2005, compared to previous forecasts by the government, local and international institutions which had predicted the economy to growth by 0.2%.
Last September, the OECD revised its GDP forecast for Italy, hiking it up from -0.6% to +0.2%.
Speaking on Monday, Italian Economy Minister Giulio Tremonti said that Istat's calculations for 2005 were
misleading because they did not take into account the fact that there were four fewer working days last year than in 2004.
Had this been taken into consideration, he claimed, Italy's GDP last year would have risen by between 0.25 and 0.30% and been in line with previous forecasts. The government's current forecast for 2006 is for GDP to rise by 1.5%, while the OECD has predicted 1.1%.
