Italy’s economy will not return to its pre-crisis peak until 2020 unless policymakers do more to tackle financial risks, the International Monetary Fund warns.
The delays mean Italy faces “two lost decades” following the recession before the country puts the economic crisis behind it, with the IMF warning that recovery remained fragile and post-crisis reforms were slow and “piecemeal”.
High levels of public debt, currently 133% of GDP, mean policymakers have very little room to respond to financial shocks, such as Brexit, to keep the economy on track, while politicians are struggling with how to handle growing levels of bad debts in the economy.
If the crisis forced the country back into recession, it could risk undermining strong growth in Italian new car sales, where demand is up more than 20% compared to the same period last year and residual values have been rising across all vehicle segments, particularly for SUVs.
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