Investment and productivity needed for growth says Bank of Italy chief – English

(ANSA) – ROME, NOV 30 – The road to economic growth passes
through investment and productivity, Bank of Italy Governor
Fabio Panetta said on Thursday.


   
“The relaunch of the Italian economy” must follow a “path
(leading) from investment to productivity and then to growth”,
which will “therefore depend on the ability to increase the
product per unit of labour”, said Panetta.


   
Making this happen “requires changes in several areas”, he
added, indicating investment in innovation “as the starting
point”.


   
However, such investment “does not reduce the urgency of other
measures”, continued Panetta, pointing to “the functioning of
the financial system, the labour market, the public
administration, and justice”.


   
Italy’s central bank chief also said the “positive situation” of
Italian banks “is a strong point of the economy as a whole” and
that the banking system is “able to handle unfavourable
developments”.


   
“We can expect its profitability to decline but remain largely
positive in the next two years ,” continued Panetta.


   
“With the weakening of the economic situation in Europe and
Italy, some of the factors that have so far strengthened the
banks could disappear in the coming months,” he added.


   
In other points, Panetta said the drop in inflation across the
eurozone “is good news”.


   
On Thursday Eurostat said that inflation in the eurozone fell to
2.4% in November from 2.9% the previous month according to
preliminary estimates.


   
Panetta said the European Central Bank (ECB) now needed to
“proceed with caution” in normalising its budget policy
following a long string of interest rate hikes in a bid to
combat high inflation.


   
Rapid adjustments “would have restrictive effects on the economy
that would not be justified by the inflation outlook”, he added.


   
(ANSA).