Roundup: Italy returns to growth but needs more far-sighted policies: economists

The Italian economy is gradually returning to growth after three years of negative figures, but needs more far-sighted policies to leave the crisis behind, experts have said.

"A return to modest growth, an improvement of employment levels and a stabilization of public finance are the results achieved by Italy in recent months," said Mariano Bella, director of the research department of Confcommercio, Italy's largest confederation of enterprises.

The Italian economy has registered positive signals in the first three quarters of 2015, he noted, with a 4.5-percent growth of exports, a 1.0-percent increase of household consumption and a 0.3-percent rise of investments. A labor reform and related tax advantages have pushed job increase.

Bella highlighted the positive impulse given by a fall in oil prices, a weak dollar, an expected growth of global trade by around 3 percent this year and the expansionary monetary policy of the European Central Bank (ECB). These factors have lowered production costs for manufacturing, helped exporters to gain market shares in non-euro markets and encouraged companies to make investments and households to purchases durable goods.

However, there is still a long way to go for Italy to leave years of economic crisis behind, Bella told Xinhua. A very high fiscal pressure on families and enterprises as well as the country's slow-moving legal system, bureaucracy and logistics are among the factors hampering economic growth, he said.

Francesco Daveri, an economics professor at the Catholic University's Piacenza campus, agreed that under the government of Prime Minister Matteo Renzi, the Italian economy, drawing benefits from a favorable international scenario, is gradually returning to growth, with its gross domestic product (GDP) up by 0.7 percent in 2015 and expected to consolidate to some 1.5 percent in 2016.

The approval of the so-called Jobs Act labor law and an ongoing reform of the banking sector have been "appropriate steps to send signal to foreign investors that Italy was ready and eager to open up and receive foreign capital," Daveri said.

Daveri added that the government has contributed to accelerating domestic growth by starting a much needed program of tax cuts.

"In 2014-2015, the tax rebate of 80 euros (87.74 U.S. dollars) monthly has encouraged households to consume," he said, adding that the tax cut program, however, has proceeded too slowly.

"Taxes could have been cut at a faster pace had the government cut public spending more aggressively than it has done so far. This may have partly slowed down recovery but at least would have posed a more solid basis for stronger growth in the future," he pointed out.

"The taxes paid by Italians will not fall in 2016 compared to 2015, as they will simply be cutting their upward trend of the last few years. If the process of curbing spending and cutting tax rates continues, we will probably see a genuine tax reduction only in 2017," said Daveri.

Andrea Goldstein, an economist and Managing Director at the Bologna-based think tank Nomisma, commented that Italy's growth perspectives are certainly modest with respect to some other European countries, but also mark "a trend reversal after many years of crisis."

In his view, in 2016 Italy might achieve a 1.3 to 1.4 percent growth. Goldstein believe the improved global situation, an accumulated demand after years of crisis and the labor measures and tax advantages introduced as part of Renzi's plan to revive the economy will fuel domestic consumption and investments.

"There are also encouraging signals that unemployment - which currently stands at around 11.5 percent - could fall below 10 percent," he told Xinhua.

But there are structural problems in Italy, such as growing precariousness and widespread poverty that have been fostered by the global economic crisis of recent years and cannot be solved in the short or medium term, but need to be addressed though more far-sighted policies, Goldstein underlined.

There is also a significant gap between developed northern Italy and the southern part of the country, where recovery is much slower, Goldstein noted. In his view, among the most urgent steps to be made, Italy would need to introduce more liberalizations on public services and private practices, and work at improving its school system. Enditem