As new statistics Friday confirmed that Italy has pulled out of recession, politicians and policy makers cautiously cheered and said it was important to make the most of the new strengthen by advancing economic reforms.
Italy is in “the very advanced stage of convalescence” as it recovers from recession, Economy Minister Pier Carlo Padoan said at G7 meetings in Germany.
He spoke after Istat, Italy’s national statistics agency, confirmed preliminary estimates and said that in the first quarter of this year, the economy grew by 0.3% after a loss of 0.3% in the final three months of 2014.
That marked the first quarter of growth in almost two years – since September 2013.
Italy is “no longer the sick man of Europe”, added Premier Matteo Renzi.
Buttressing the new statistics on growth in gross domestic product (GDP), Istat also reported that the Italian economy pulled itself out of deflation in May with a slight rise of 0.2% in the overall inflation index.
In its preliminary estimates, the agency said that the annual measure of prices rose from the -0.1% reported in April, the fourth consecutive month of negative prices. Central banks around Europe have been raising concerns about deflation, generally seen as a dangerous sign of economic weakness.
Meanwhile, prices in the so-called consumer trolley of goods for the average Italian household rose this month by 0.8% as costs for such goods as food, along with household and personal care items rose compared with the same time last year, Istat said.
Padoan said that Italy is now being touted as a good example of reforms should be implemented.
Given the renewed growth, now is the time to capitalize on the fragile recovery with “wider reforms that will change the structure of the economy,” said Bank of Italy Governor Ignazio Visco.
Speaking at the G7 meetings, Visco said that since 2011, Italy has implemented many reforms but now it is time to expand these further.
“An exit from the crisis must be consolidated as soon as possible”, with an expansion of structural reforms, he said.
Policy-makers around Europe have praised Italy’s reform efforts that have been deeply controversial at home, including deep changes to the labour market, tax reforms, education system reforms and changes to the election laws.