New Analysis: Italian PM predicts economy growth to prove experts wrong in 2019

Source: Xinhua| 2018-12-29 05:43:38|Editor: Mu Xuequan
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ROME, Dec. 28 (Xinhua) -- Italian Prime Minister Giuseppe Conte used his final press conference of the year to double down on the government's belief that the Italian economy will grow fast next year than anyone else predicts.

Speaking to reporters Friday, four days before the close of the year, Conte predicted the Italian economy growth will easily outpace the estimates of 0.4 to 0.9 percent from an array of multilateral groups and private entities including the Organization for Economic Cooperation and Development, the International Monetary Fund, the World Bank, the European Central Bank, and private investment bankers Morgan Stanley and Goldman Sachs.

Conte said the economy would grow "at least" one percent and probably more, noting that the government's budget plan includes a "robust investment plan, and structural reforms" aimed at stimulating economic growth.

For its part, the government's budget plan is still based on the projection that the economy will grow 1.5 percent in 2019.

Analysts, however, told Xinhua that even if the 2019 budget sparks growth, it will unlikely to match Conte's rhetoric.

"I think this is a case where everyone, including the prime minister, knows the economy won't grow as much as the estimates but Conte is obligated to say it will," Arianna Montanari, a professor of the sociology of political phenomena at Rome's La Sapienza University, told Xinhua.

The issue of growth is an important one. Slower growth next year would balloon the budget deficit beyond the agreed 2.04-percent of gross domestic product threshold after two months of difficult haggling with the European Commission -- even if spending limits were respected across the board. Further cutbacks to stay within the deficit target would hinder growth prospects even more.

Flavio Chiapponi, a political communications specialist at the University of Pavia, said that Conte could not back down from the positions the government held during the budget negotiations just days after those talks concluded.

"It would not have been very palatable in terms of public opinion if Conte had gone out and said everything Italy promised during the budget negotiations is no longer possible," Chiapponi said in an interview. "At least for now, Conte can say the government has not been forced to abandon its electoral spending promises."

Both Montanari and Chiapponi agreed that if the government's bug bet it will surprise observers with its economic growth fails, it would mean trouble for Conte and his allies.

"If growth falls flat in 2019 after all the promises, it would lead to a very serious government crisis," Chiapponi said.

Montanari agreed: "It's only possible to survive on promises for so long," she said.

"People will eventually start to realize they've been misled and then there will be trouble. I don't think the government would survive that."

The next big challenge for the Conte government and the two parties that support it -- the anti-establishment Five-Star Movement and the nationalist League -- will be elections for the European Parliament in May. A strong results for the Five-Star Movement and the League could help them consolidate power until the next elections in 2024, no matter what happens later in the year.