ROME: Italy will probably come out of recession in the first quarter and then continue to post weak growth for the foreseeable future but decisive policy action is needed for a firmer recovery, the deputy governor of the Bank of Italy said on Monday.
Salvatore Rossi said in a speech at Udine Univeristy in northern Italy that the January to March period should show “a minor increase in gross domestic product,” which would be the first quarter of growth for three and a half years.
He said the Bank of Italy expects similarly modest quarterly growth rates over the next two years but this would only restore the level of output to where it stood at the end of 2012.
The euro zone’s third largest economy would still be far smaller than it was before the long period of stagnation and triple dip recession that began in 2008.
Rossi noted that GDP in Italy is around nine percent lower than its level of 2007, while in the same period economic output has fallen 5 percent in Spain and risen by 2 percent in France and by 5 percent in Germany.
To post a more convincing recovery Italy’s myriad of small and medium sized companies, many of which are not competitive, have to merge and consolidate in order to be able to invest more, Rossi said.
He also called for an improvement in the quality of Italy’s universities in order to promote innovation and ensure a better qualified workforce.
