Bankitalia Bulletin: moderate growth, GDP + 0.5% in 2020 and + 0.9% in 2021

2020-01-17T14:34:28.049Z

The Italian economy will return to "moderate growth" in the 2020-2022 three-year period. The Bank of Italy says so in the economic bulletin, according to which there will be an increase in GDP of 0.5% this year, 0.9% in 2021 and 1.1% in 2022. For last year instead growth is estimated at + 0.2%. In 2020-22 the activity will be sustained "both by the gradual recovery of international trade and by the moderate expansion of domestic demand". Investments, despite being affected by persistent uncertainty, will be boosted "by the progressive recovery of global demand prospects and by conditions expansive funding. " The decline in sovereign spreads observed since the beginning of June will contribute "to increase the accumulation of capital by approximately 3.5 percentage points over the 2020-22 three-year period". Inflation will gradually increase, "from 0.7% in the current year to 1.3% in 2022, mainly due to a recovery in wages and profit margins that would benefit from the best cyclical phase". The forecasts, Via Nazionale points out, "presuppose a modest growth in world trade, albeit gradually recovering; accommodating monetary conditions, consistent with the orientation confirmed by the ECB's board of directors; orderly trends on Italian financial markets, which translate into a cost credit content for businesses. " Compared to the picture of the July economic bulletin, "the forecast growth is lower for the current year, almost in line for 2021. The effects of the more marked weakness of the global economy are largely offset by those of the greater monetary stimulus and lower risk premiums on Italian sovereign debt. "" Growth - adds Palazzo Koch - is still exposed to significant risks, connected with the increasing geopolitical uncertainty, with trade conflicts only partially reversed and with the weak performance of the "economic activity in our major European partners. It could also be lower than foreshadowed if the implementation of the substantial planned public investments, included in the forecast framework, were delayed or if tensions on the financial markets were reignited".