MILAN Jan 5 Italy's government is
sticking to its forecast of a 0.4 percent fall in gross domestic
product in 2012, a government source told Reuters on Thursday,
banking on a better scenario than that painted by some private
forecasters in recent weeks.
"Exports are holding up rather well and manufacturing is
stabilising. The good perfomance of the German economy helps and
also the latest U.S. data are not bad," the source said.
The source said new government incentives may spur private
investments in Italy but that private consumption remained a
deeply sore point.
"2012 is going to be a disaster for disposable income.
Salaries are frozen, inflation is not going down and taxes are
The government forecast a 0.4 contraction in Italy's 2012
GDP at the beginning of December when it approved a 33 billion
euro austerity package.
In mid-December, Italy's main employers' lobby Confindustria
slashed its 2012 forecast for the country's economy to a 1.6
percent contraction.. A few days later, also
Milan-based think-tank REF forecast a 1.5 percent fall in
Italy's 2012 GDP growth.
The Italian economy is expected to have grown by a meagre
0.6 percent in 2011.