Italy's economic policies likely to hurt the poorest: IMF

The economic policies of Rome's populist government make Italy vulnerable to a crisis of market confidence, with the poorest likely to suffer the most, the IMF warned on Wednesday. "The authorities' policies could leave Italy vulnerable to a renewed loss of market confidence," an International Monetary Fund annual report on the country said.

"Italy could then be forced into a notable fiscal contraction, pushing a weakening economy into a recession. The burden would fall disproportionately on the vulnerable," the IMF added.

Deputy Prime Minister Matteo Salvini, head of the far-right League party, scoffed at the report, saying it would "bring happiness" to Italy because the IMF has "always predicted the opposite of what happens".

On January 31, official data showed that the Italian economy, the eurozone's third largest, contracted in the fourth quarter of 2018, which meant the country was in a technical recession.

The fund expects the Italian economy to grow by no more than 0.6 per cent this year, well below the government's own estimate of 1.0 per cent

The European Commission is tipped to lower its Italian growth forecast on Thursday, and slower growth could spell trouble for Italy, where around 20 per cent of national output is swallowed up each year by payments on the public debt, the second biggest in the eurozone.

Italys economic policies likely to hurt the poorest: IMF

The economic policies of Romes populist government make Italy vulnerable to a crisis of market confidence, with the poorest likely to suffer the most, the IMF warned on Wednesday. The authorities policies could leave Italy vulnerable to a renewed loss of market confidence, an International Monetary Fund annual report on the country said. Italy could then be forced into a notable fiscal contraction, pushing a weakening economy into a recession. The burden would fall disproportionately on the vulnerable, the IMF added. Deputy Prime Minister Matteo Salvini, head of the far-right League party, scoffed at the report, saying it would bring happiness to Italy because the IMF has always predicted the opposite of what happens. On January 31, official data showed that the Italian economy, the eurozones third largest, contracted in the fourth quarter of 2018, which meant the country was in a technical recession. The fund expects the Italian economy to grow by no more than 0.6 per cent this year, well below the governments own estimate of 1.0 per cent The European Commission is tipped to lower its Italian growth forecast on Thursday, and slower growth could spell trouble for Italy, where around 20 per cent of national output is swallowed up each year by payments on the public debt, the second biggest in the eurozone.