Italy govt sees 2008 GDP growth of 1.3-1.6 pct, 2007 GDP below 2.0 pct

Sep 25, 2007 - Italy's economy minister Tommaso Padoa-Schioppa said that economic growth this year and next will be slower than previously expected because of the slowdown of the world economy.

Speaking in a parliamentary hearing on the 2008 budget, Padoa-Schioppa said that Italy's gross domestic product (GDP) will grow slightly less than the previously forecast 2.0 pct in 2007 and will grow somewhere between 1.3 and 1.6 pct in 2008 compared with the earlier estimate of 1.9 pct.

Both forecasts are within the forecast range of a consensus of economists that pinned GDP growth at 1.7-1.9 pct this year and at 1.3-1.6 pct in 2008.

"Our estimate (for 2008) will probably be in the middle of the range," Padoa-Schioppa said.

The economy ministry confirmed the government's forecasts for Italy's public deficit to be 2.5 pct of GDP in 2007 and 2.2 pct in 2008.

Italy's public debt is seen falling to 105.1 pct of GDP in 2007 from 106.8 pct in 2006, and to 103.5 pct in 2008, the ministry said.

Earlier government forecasts had seen 2007 debt at 104.7 pct of GDP and 2008 debt at 102.7 pct.

The ministry sees Italy's primary surplus being at 2.4 pct of GDP in 2007 and at 2.6 pct in 2008.

The minister said that he has received spending requests of 20 bln eur from Italian ministries and proposals for spending cuts of 5 bln.