(Bloomberg) -- Confindustria, Italy's main employers' lobby, said the 1.5 percent expansion for 2019 targeted by the populist coalition “seems very improbable.”
The organization issued its October report as the government responded to European Union criticism by saying it will leave its budget program unchanged for next year. The business organization said it forecasts growth of 0.9 percent in 2019, down from 1.1 percent for this year.
“Both internal and external conditions for growth have weakened,” Confindustria said Monday. “This scenario of weak growth could even turn out to be on the optimistic side.” The lobby said it already figures on a slowdown in output for the third quarter of this year.
Confindustria said that Italian expansion would have to be 0.5 percent per quarter for four consecutive quarters to reach the government's 1.5 percent goal next year. It added that the quarterly growth this year has averaged only 0.2 percent.
Italian bonds rose slightly, with the spread over German 10-year yields narrowing 1 basis point to 301 basis points as of 5:38 p.m. in Rome. The gap reached a five-year high of 341 basis points during trading on Friday.
To contact the reporters on this story: Kevin Costelloe in Rome at kcostelloe@bloomberg.net;Giovanni Salzano in Rome at gsalzano@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Dan Liefgreen
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