Ignazio Visco: Italy's current economic scenario, outlook and banking industry developments

Address by Mr Ignazio Visco, Governor of the Bank of Italy, at the Annual Meeting of the Italian Banking Association, Rome, 12 July 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The current economic scenario and the outlook

The Italian economy has gained strength. The latest economic indicators confirm that production is picking up. All in all, the most recent surveys of households and firms signal persistently high levels of confidence and a resumption of investment; the outlook for exports and employment remains favourable. The upturn in growth has had a positive impact on lending, even though firms' demand for financing is still weak, reflecting the ready availability of own funds and the problems facing certain sectors.

If the economy is to continue to strengthen, the global cycle must keep improving, there must be no increase in the volatility of international financial markets, and monetary and credit conditions in the euro area must remain highly expansionary. In early June the Governing Council of the ECB confirmed its commitment to maintaining a very substantial degree of monetary accommodation. To ensure a sustained convergence of inflation towards the price stability objective, it expects that official interest rates will remain at present levels for an extended period of time, and well past the horizon of the net asset purchases, which will run until at least the end of this year.