Throughout this crisis, I have stressed that the choice between health and the economy is a false dilemma. Another false dilemma is the choice between a vigorous recovery and sustainability. We must pursue both objectives together.
Our latest Economic Outlook, released last Wednesday, paints a very bleak picture. The 6% annual decline in global GDP that we project for 2020 is far bigger than any other decline we have seen in the 60 years of the OECD’s existence.
Thank you for joining us today for the launch of the OECD’s Capital Market Review of Italy 2020: Creating Growth Opportunities for Italian Companies and Savers. This is the first Review of this type that we produce for Italy and I would like to thank Minister Gualtieri for his support during its preparation.
In recent years, Italy has experienced a modest economic recovery resulting in an average growth of 1.1% between 2015 and 2018. Following important labour market reforms, it has also experienced a significant rise in the employment rate, by 3 percentage points since 2015. And there have also been other encouraging improvements, such as the shift of Italian export industries to higher value added products.
Today, the global economy is facing serious headwinds. According to our latest Economic Outlook released earlier this month, global growth is projected to further decrease from 3.6% in 2018 to 3.3% in 2019 and to 3.4% in 2020. Trade and investment growth remain sluggish and the large increase in inequality many countries experienced before the crisis persists.
We questioned how to maximise the impact of cultural heritage; how to fulfil the potential of creative industries; how to finance culture; or how to better link art to technologies. We also explored the linkages of culture with urban regeneration, education, wellbeing and inclusion.
Indeed, Art and Culture are not just the expression of our finest human values and identities; they are also very often the “invisible universals” that hold communities and societies together. They nurture our spirit, our well-being and the well-being of our societies.
In the post-war period, Italy enjoyed high growth by exploiting its decentralised production base and nurturing the technical and vocational skills needed for specialised manufacturing. But over the past fifteen years, Italy’s economic performance has been sluggish and productivity has stagnated. This is partly due to skills challenges.
Growth seems to be slowly picking up. This is good news. But we are still facing a vicious circle of low productivity growth, sluggish demand, stagnant wages and, in many G7 countries, rising or high levels of inequalities.
Despite the challenging global environment, Italy has made important reforms. We now predict the Italian economy will grow at a rate of 1% for 2017 and 2018. Reforms have helped to create 3.2 million new permanent contracts and boost total employment by 2% since early 2015.