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Italy’s gross domestic product (GDP) growth rate will remain very low this year as global headwinds such as the coronavirus outbreak are seen adding to an already subdued outlook, Italy’s central bank governor and the European Central Bank (ECB) governing council member Ignazio Visco said on Saturday in a speech to the Assiom Forex conference in Brescia, northern Italy. 

Key quotes

Italy’s performance remains dependent on its European and global partners. Financial conditions are benefiting from a reduction in political uncertainty.

An additional risk factor has emerged in the form of the possible repercussions of the spread of the new coronavirus, especially for the Chinese economy.

The effect could be limited in the order of a few tenths of a percentage point of aggregate demand, but a larger impact cannot be ruled out.

The ECB’s low interest-rate policy has had “practically no effect” on Italian lenders, as banks offset their negative impact on net interest income with a favorable impact on the quantity and quality of credit, together with an increase in fee income.