Morgan Stanley Expects Lower Italian Growth at 0.5% in 2019

Italy will struggle to achieve the growth rate that the anti-establishment government has planned for 2019, according to Morgan Stanley.

In its latest 2019 budget draft plan, Rome forecasts a growth rate of 1.5 percent for 2019 — compared to Morgan Stanley’s latest forecast of just 0.5 percent for gross domestic product (GDP) next year. The figure showing the investment bank’s forecast is only one-third of the Italian government’s own estimate.



“We expect a contraction in economic activity towards year-end, mainly driven by domestic demand, both consumer spending and business investment,” the bank said in its European Economic Outlook note, published this week.

“Further out, the fiscal boost to growth will probably have some beneficial effects on consumption. But it’s unlikely to be so big as to result in an improvement of the public finances,” the note added.

The Italian government expects increased spending on infrastructure projects and providing people with more income will revive the subdued Italian economy.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza