ROME, Feb. 7 (Xinhua) -- The slowdown registered in the Italian economy was "a setback, rather than a recession", the country's Economy Minister Giovanni Tria said on Thursday.
His comment came shortly after the European Union (EU) Commission drastically cut its forecast on Italy's growth in 2019 by 1 percentage point, and specifically to 0.2 percent from 1.2 percent predicted in November.
This negative outlook added to data by Italy's National Institute of Statistics (ISTAT) last week, which showed the Italian GDP declined by 0.2 percent in the last quarter of 2018, following a 0.1 percent drop in the third quarter.
With two consecutive quarters of negative growth, the country fell into technical recession.
The 1-percentage point downward revision of growth was due to "a worse-than-expected cyclical slowdown in 2018, amplified by global and domestic policy uncertainty, and firms' substantially less favorable investment outlook", the EU Commission stated in its Winter Outlook.
"Uncertainty related to the government's policy stance and rising financing costs took its toll," it explained.
Addressing the Lower House in the morning, however, Tria ruled out the government will have to pass a so-called "corrective maneuver" -- meaning cutting measures to revise the budget and correct public finances along the year.
"The cumulative decline in the second half of 2018 is limited to 0.36 percentage points; therefore, we can call it a setback for now, rather than true recession," Tria told lawmakers.
"I do not see today the need to adopt a corrective maneuver... this is rather the time to focus all our efforts on the implementation of the economic measures provided by the budget law."
The minister explained that -- according to government's analyses -- the 1-percentage-point cut in growth forecast from Brussels derived "for 0.6 points from negative data concerning the second half of 2018, and for 0.4 points only from an evaluation of 2019 trends".
"This confirms the EU Commission is only slightly less optimistic about future growth, having taken note of an unexpected deterioration of the economic cycle at the end of 2018," Tria said.
"If the global situation will allow it, we can resume a positive path in the next quarters, and we can count on several economic instruments to relaunch growth."
Expansionary measures included in the 2019 budget passed by Prime Minister Giuseppe Conte's populist government were being either implemented or discussed in parliament, so that the country would start feeling the benefit by the second half of 2019, according to the official.
"Considering latest estimates, the current decline might lessen in the first quarter (2019) already, and it is possible our GDP will return to a positive trend," Tria said.
A basic income program for the poor and the lowering of retirement age were two key budgetary measures passed by Conte's government; yet they proved particularly controversial in the eye of domestic opposition forces and some business organizations.
One major argument against the first was that the basic income would be too high compared to the country's average salary levels -- and especially among young workers -- thus discouraging unemployed people from looking for a job.
This position was widely shared by members of Italy's largest industrial association Confindustria, for example.
As for the pension reform, critics said it was both too expensive and unwise for Italy, since the country has the second highest debt-to-GDP ratio in the EU after Greece, and a large ageing population in constant increase.
From the government's perspective, the measures were instead seen as two tools necessary to lift the quality of life among Italians, and especially among the most deprived sectors of society, after years of austerity due to a long economic crisis.
