Bank of Italy lowers economic growth prediction

ROME, July 14 (Xinhua): The Bank of Italy estimated the Italian economy would grow just 0.1 per cent this year, according to its quarterly economic bulletin, a level that economists said would make it "highly unlikely" Italy will manage to honour its recent budgetary promises with the European Commission.

The Bank of Italy said that lower-than-expected industrial production figures were hurting growth prospects and it blamed that on political worries.

"A heightened uncertainty about budget policy from next year on could generate new turbulence in the financial markets and influence companies' investment plans," the bulletin said.

The bank did predict more robust growth in the coming years, with its models showing the economy growing 0.8 per cent next year and 1.0 per cent in 2021.

But it is the 0.1-per cent prediction for 2019 that could cause problems, economists said.