--State Accountant Monorchio Sees Debt-GDP Ratio At 60% Before 2010
--Center-Right's Tremonti Calls Visco, Amato 'Gangsters' For Tax-Cutting 2001 Budget
ROME (MktNews) - Italian Treasury Minister Vincenzo Visco on Saturday confirmed that the government is to lower its 2001 GDP growth forecast of 2.9% later this month, Italy's main newspapers reported Sunday.
Speaking to reporters on the fringes of an economic workshop in Cernobbio, northern Italy, Visco reportedly said this year's growth "will be a bit lower" than the government's official 2.9% forecast, and the government will review its projections "before the end of this month."
Visco has repeatedly said he considers projections by the IMF and the European Commission of Italian growth around 2.5% to be slightly on the pessimistic side. It can therefore be expected that the government's new forecast will be probably be either 2.6% or 2.7%.
Also in Sunday's press, State Accountant Andrea Monorchio said he believed Italy could bring its public debt-to-GDP ratio down to the Maastricht treaty's 60% reference value before 2010.
"I believe we will get there relatively soon, in any case before the 2010-2011 date that we have been looking at up to now," Monorchio told the financial daily Il Sole 24 Ore.
Monorchio noted that debt servicing costs will benefit from the fact that, "as time goes on, the bonds that the Treasury issued in the past at much higher rates than current ones are going to expire."
He added that his upbeat view required that Italy maintain "a stable primary surplus of around 5% of GDP," something he is "convinced" can be achieved.
The primary surplus-GDP ratio stood at 5.0% in both 1999 and (net of UMTS revenue) in 2000. Last year's debt-to-GDP ratio came in below expectations, falling to 110.3% from 114.5% in 1999.
Much of the Italian press's coverage of the Cernobbio workshop focused on an exchange of insults between Visco and Giulio Tremonti, the man that center-right leader Silvio Berlusconi has said will be his Treasury Minister if, as widely expected, the center-right wins the May 13 general election.
Tremonti called Visco and Prime Minister Giuliano Amato economic "gangsters" for having presented tax cuts in the 2001 budget which, in Tremonti's view, are not supported by lower spending, and are destined to create major problems for this year's public finances.