Italy predicted to exit recession by end of 2013

Italy’s economy will begin emerging from its longest slump since the Second World War in the fourth quarter of this year and should grow through 2014, its economy minister Fabrizio Saccomanni said.

Asked when Italy would exit the recession, Saccomanni told Rome daily Il Messaggero in an interview published yesterday: “By the end of this year.”

“The signs can already be seen in this third quarter; the fourth quarter should see the first positive number. And the whole of 2014 will be positive.”

Italy has been in recession since mid-2011 and its central bank expects gross domestic product to contract by around 2% in 2013 and grow by about 0.5% in 2014.

The Rome government, which faces the challenge of reviving the economy while keeping the public deficit within EU-mandated limits, has a 1.3% growth forecast for 2014. Most analysts and European authorities see that as too optimistic.

The European Commission recommended in May that Italy be removed from the EU’s excessive deficit blacklist, ending strict monitoring of Italian finances which began when it breached the 3% of GDP limit in 2009.

Saccomanni said now it was no longer blacklisted, Italy had more money to spend on investments and to pay arrears the state owes to firms, provided it did not breach the threshold. Italy is also under pressure to bring down its public debt, which at a projected level of around 130% of GDP this year is the second-highest in the eurozone after Greece.

Saccomanni said the government would move ahead with plans to use the sale of state properties to cut the debt, though estimates Rome could reap €400 billion from selling state assets were too high.

“We will start with real estate... it will not be an easy or quick job... but it is right to get going to give a concrete signal to the market,” the minister said.

He declined to comment on whether state stakes in companies such as Eni and Enel could be sold.