Italy: Public finances on track

- "After the solid performance in 1H 2010, we have revised slightly up our GDP growth call from 0.9% to 1.0% in 2010, and from 1.0% to 1.1% in 2011. However, our outlook envisaging a moderation of growth in the second half of this year remains safely in place."
- "Data on the labor market remain mixed and do not suggest that a genuine turning point has been reached yet. The unemployment rate seems close to peak, but recent dynamics of inactive people and labor force are less encouraging."
- "Even taking into account the statistical discontinuities introduced in June by the Bank of Italy, bank lending to households and non-financial corporations recorded a further improvement in recent months, confirming that the credit recovery is proceeding on the expected path."
- "After the remarkable surge in July, Italy’s CPI inflation edged down mildly in August to 1.6% yoy. The core inflation differential vs. the eurozone has widened over the past year. Producer prices accelerated further but surveys suggest that some moderation might lie ahead."
- "In the Focus section we analyze the details of the budgetary correction that had been unveiled in May and that was approved by the Parliament during the summer. The commitment on expenditure-cutting measures is encouraging, but implementation risks call for close monitoring ahead."

Unicredit Italy Monitor 20100927

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