News Analysis: Italy's economic indicators mixed, country must stay course: economists

The latest waves of economic indicators for Italy have told a mixed tale -- with some data raising hopes for a recovery, other information showing that many obstacles remain. But economic analysts say the only thing Italy can do is stay the course.

Italy has been in the grips of an economic malaise for more than a decade, more far longer than the European Union as a whole. Every new economic statistic is cast in a light about whether or not it may signal an economic recovery.

Lately, there have been plenty of new statistics to consider.

On the good side: consensus prognostications have shown an uptick in projections for Italy's economic growth this year to 0.6 to 0.8 percent, up from 0.4 to 0.5 percent in 2014; exports are rising again; the tourism industry is on pace for its best year in a decade; consumer confidence is trending upward; the country continues to benefit from a weak euro that makes experts more attractive and low petroleum prices that make manufacturing less expensive.

And on the bad side: economic growth is expected to slow in the current quarter; the national debt has reached its highest level ever, at 2.2 trillion euros (2.4 trillion U.S. dollars); prices are falling again, giving rise to the possibility of dangerous deflation; salaries were just about flat in June; housing prices slipped 3.6 percent; industrial orders are down; unemployment remains stubbornly high; research and development spending continues to contract; access to credit is still below European Union norms.

So is the news for Italy's economy good or bad?

"The short answer is that it's complicated," Carlo Bastasin, an economist with the LUISS University School of European Political Economy, said in an interview. "Overall, though, I think we are seeing a gradual improvement in Italy's economic situation. But it is very slow."

Bastasin said there are not just mixed signals depending on which indicator one pays attention to but also based on regions.

"Veneto and Lombardy (both northern Italian regions) are doing much better than the rest of the country," the economist said. "Unemployment levels are lower because they are strong exporters. The regions were unemployment rates are much higher are those where exports are low," he added.

What should Italy do to get all the indicators pointed in the same direction? Renzo Orsi, an economist with the University of Bologna, told Xinhua analysts must be patient and give time for some of the key reforms from the Matteo Renzi -- most notably reforms creating more flexibility in the workplace, reducing bureaucracy, and lowering taxes -- to take hold.

"The reforms are essential and the government cannot back down from them," Orsi said. "Aside from that, it's important for Italy that the policies of the European Central Bank on the strength of the euro continue and probably that fuel prices stay relatively low. After that, it's a question of waiting for what is a slow process." Endit