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2002 OECD Economic Surveys: Italy 2002

image of OECD Economic Surveys: Italy 2002

This 2002 edition of OECD's periodic review of Italy's economy examines recent economic developments, policies and prospects and includes special features on reducing debt and the tax burden, making public spending more effective and on reforms to raise growth potential.

English Italian, French

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Assessment and Recommendations

Following a short period of economic growth at around 3 per cent, the economic climate began to deteriorate in late 2000. This was primarily related to external factors – the sharp slowdown in world trade, and the negative impact of higher energy prices on household incomes. Underlying domestic economic conditions remained more conducive to growth, with the positive performance of the labour market, especially in service and construction sectors, sustaining consumer confidence and limiting the domestic demand downturn.  Indeed, prior to the 11 September terrorist attacks in the United States, order books appeared to be improving. But a sharp near-term slowdown is now foreseen, as export markets stagnate, businesses delay investment plans in response to rising world uncertainty and households raise precautionary savings. The annual growth rate of the Italian economy in 2001 could fall to 1.8 per cent from the near 3 per cent registered in the previous year.

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