`RIL (Reuters) – The outlook for Italy’s economy is improving but higher interest rates to curb inflation could pose a threat to growth, Italy’s economy minister said on Saturday, sending a warning to the European Central Bank (ECB). ).
“Fighting inflation with monetary policy is not enough, a recession cannot be the price paid for fighting inflation,” said Giancarlo Giorgetti.
Giorgetti is from the Lega party, which last month criticized the ECB for going ahead with its latest 50 basis point rate hike despite the turmoil in the banking sector.
Speaking to the Ambrosetti Business Forum, Giorgetti confirmed that improvements in the first half of the year would allow Italy to slightly raise its official forecast for economic growth of 0.6% in 2023.
He added that it would be difficult for the European Union to reintroduce fiscal rules that remain suspended until the end of 2023.
“The political climate of détente created by COVID and war around fiscal rules during these crisis years will not make it easy to return to any rule,” he said.
Reporting by Giancarlo Navach and Federico Maccioni, writing by Keith Weir, editing by Emelia Sithole-Matarise and Mark Potter
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