ITALIAN ECONOMIC OUTLOOK LESS BRIGHT, OECD SAYS
Italy's economic outlook for 1987 and 1988
is likely to be less favourable than last year with slightly
lower growth, higher unemployment and an increased trade
deficit, the Organisation for Economic Cooperation and
Development (OECD) said.
    But the OECD, in its half-yearly report, forecast a
slightly lower inflation rate over the next two years. Last
year Italy ranked as one of the OECD's fastest growing
economies with Gross Domestic Product (GDP) growth at 2.7 pct.
    The OECD said Italy's GDP may grow by three pct in 1987,
but will then fall back to 2.5 pct in 1988.
    The inflation rate will probably stabilise at around five
pct during the projection period as a result of a turnaround in
import prices, particularly oil, an acceleration in labour
costs and the effects of domestic demand pressure, the report
said.
    This year, and to a lesser degree in 1988, domestic demand
should be stimulated by buoyant growth in household consumption
made possible by wage increases following pay negotiations.
    Domestic demand pressure, coupled with the deterioration in
Italian competitiveness, is likely to stimulate imports and
adversely affect exports in 1987 and 1988. This could result in
a sharp negative contribution to the currrent account.
 REUTER
