Italy Feb output at 8-month high

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Fri Apr 14 16:48:07 PDT 2000


Saturday 15 April 2000

Italy Feb output at 8-month high MILAN: Italian industrial output hit an eight-month high in February, beating market expectations, but economists said internal demand still remained the weak link. National statistics institute ISTAT said industrial production rose a provisional 1.5 percent month-on-month on an adjusted basis in February, the highest rise since June 1999. Analysts polled by Reuters had expected a rise of 1.2 percent. On an unadjusted basis, production rose 7.7 percent year-on-year in February after a rise of 4.1 percent in January. Adjusted output in January had fallen 1.1 percent on a month-on-month basis. "Italy is joining the European recovery," Lorenzo Stanca, head of research at UniCredito Italiano in Milan told Reuters Television. "But as long as foreign demand remains the motor, we cannot talk of a healthy recovery for Italy. In Italy, as in Germany, the problem is still the weakness of domestic demand." Ken Wattret, Senior Economist at BNP-Paribas in London, said 1999 had been disappointing for Italy but the economy was now gathering speed. "The manufacturing sector is positive, as we saw in the Reuters/ADACI purchasing managers' index, which rose to the highest level in March since the index began. These data indicate an acceleration in the first two quarters of this year," he said. But he added that despite economic confidence, "consumption is still uncertain", adding that a tight labour market which put the brakes on jobs growth was weighing on consumption. Luigi Buttiglione, an economist at Deutsche Bank, said lower fiscal pressure expected in 2000 should help stimulate demand. "Without a recovery in consumption, Italy will remain in last place among the five major European countries," Wattret said. (Reuters) For reprint rights: Times Syndication Service
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