OECD chief economist says Italy on track for recovery
(ANSA) – Paris, November 19 – OECD chief economist Carlo Padoan on Tuesday said the Italian government was doing the right things to encourage economic recovery, but that it could use prodding to do even more.
Thanks to measures announced by the government, Italy has ”all the conditions” to generate ”a virtuous circle” in terms of economic growth and debt reduction, said Padoan on the margins of a presentation for the OECD’s Economic Outlook in Paris.
Italian government policies are following ”the direction that the OECD has always indicated,” namely to slash public spending to free up resources to cut taxes in growth-stimulating ways, such as reducing the cost of labour.
The OECD’s top economist also emphasized the need for Italy’s public-spending reductions to focus on increased efficiency rather than simpleminded cuts.
He said measures spearheaded by Italy’s current government, led by Premier Enrico Letta, should work toward reducing Italy’s public-debt-to-GDP ratio which, in turn, would put downward pressure on interest rates Italy must pay.
Having said this, Padoan added that the Italian government could use prodding to do even more. He said that a ”more ambitious programme” to consolidate finances at a faster rate than required by European rules would do a better job of ensuring a ”rapid decline” of Italy’s public debt.