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Italian Minister Cautions ECB on Higher Interest Rate Risks

Italy's economy minister cautions the European Central Bank about the potential risks of higher interest rates while discussing the nation's economic outlook and related concerns.

Giancarlo Giorgetti
Giancarlo Giorgetti

The Positive Outlook for Italian Economy

The Italian economy is improving, but the country's economy minister warns that higher interest rates intended to control inflation could endanger growth. This statement sends a cautionary message to the European Central Bank (ECB).

Monetary Policy's Insufficiency in Fighting Inflation

Economy minister Giancarlo Giorgetti argues that relying solely on monetary policy is inadequate to combat inflation, stressing that a recession should not be the cost of battling rising prices.

League Party's Criticism of ECB's Rate Increase

Giorgetti, a member of the League party, echoes the party's disapproval of the ECB's recent 50 basis point rate increase, despite ongoing issues in the banking sector.

Italian Economic Growth Forecast Upgraded

At the Ambrosetti business forum, Giorgetti announced that Italy could modestly revise its official economic growth forecast for 2023 from 0.6% due to progress in the first half of the year.

Challenges in Reintroducing EU Budget Rules

Giorgetti also highlighted the difficulties the European Union will face when attempting to reinstate budget rules, which are currently suspended until the end of 2023. He points out that the relaxed political climate surrounding budgetary rules during the COVID and war crises will complicate a return to any rule.