• IMF: global growth remains "modest". Italy GDP + 0.1% in 2019
  • IMF: Italy reduces debt, government facing a difficult challenge
  • IMF: Eurozone, dangerous link between sovereign debt and banks

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October 15, 2019The Italian gross domestic product will remain stationary this year (-0.1%) and then grow by 0.5% in 2020. The International Monetary Fund estimates this through the World economic outlook (Weo) which cut respectively the 0.1% and 0.3% of the forecasts contained in the July update. Italy is thus confirmed as the country with the lowest estimates of the 19 Eurozone countries.

The downward revision, according to the Report presented in Washington, "is due to the weakening of private consumption, the lower fiscal stimulus and the weaker external environment". In countries with high debt, including France and Spain, should also be included, "fiscal bearings should be gradually replenished, while protecting the dynamics of public and private investments," the Report says.

The level of Italian public debt is also worrying the technicians of the Washington institute. The Fund estimates a public debt up to 133.2% in 2019 and 133.7% in 2020, reaching the 134% of GDP in 2024. Regarding the deficit / GDP ratio, this year is estimated a decrease to 2% from 2.1% in 2018. However in 2020 it will rise to 2.5%, reaching 2.6% in 2024.

"Making a credible commitment to putting debt on a descending trajectory in the medium term is crucial in Italy, where debt and financing needs are ample," explains the IMF, which has the Bulgarian Kristalina Georgieva as its new director since October 1st.

Estimates on unemployment
Despite the slowdown in employment, the Italian labor market should still continue to hold. Unemployment, Fmi estimates, should further fall to 8.6% in 2019 and 8.4% in 2020. In 2018 unemployment was at 9.1%. Inflation is still cold, estimated at 0.7% in 2019 and at 1% in 2020.

The global economy is now in a synchronized slowdown in part because of rising trade barriers and increasing geopolitical tensions. See the latest #WEO projections. #WEO #IMFBlog https://t.co/xErxkTQ8xX pic.twitter.com/GS94lQIsKL

- IMF (@IMFNews) October 15, 2019

Estimates on the global situation
The world economy is slowing down "in a synchronized way", says the International Monetary Fund, which cuts its growth forecasts to the lowest level since the great recession of 2008. In particular, global GDP will grow this year by 3%, against 3.2% forecast in the latest update of the estimates published in July, to then increase to 3.4% in 2020, against the 3.5% expected last summer.

Tensions over duties and geopolitical tensions weigh. Alone the trade war and the duties between the United States and China are worth a cut of the GDP equal to 0.8 to 2020.

The difficulties do not seem to save any geographical area. Advanced economies are expected to grow by 1.7% both in 2019 (-0.2%) and in 2020 (unchanged) compared to 2.3% in 2018. For the United States, the estimate of the increase in GDP stands at at 2.4% (-0.2%) and 2.1% (+ 0.2%) respectively, while that of the euro area is set at 1.2% (-0.1%) and at 1.4% (-0.2%). Germany suffers the largest cut: -0.2% to 0.5% in 2019 and 0.5% to 1.2% in 2020.

The large group of emerging and developing countries pays the Chinese slowdown and will see GDP rise by 3.9% (-0.2%) this year and by 4.6% (-0.1%) on next one. Beijing is expected to slow down by 0.1% to 6.1% and 0.2% to 5.8% respectively. For India, shearing in 2019 is even 0.9% to 6.1%.

A further overheating of commercial and geopolitical frictions, including Brexit, the IMF observes, "could derail the already fragile recovery". Hence the appeal to the political authorities to act to "reduce uncertainty and cooperate to cool tensions".