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February 25, 2020 "If the crisis" linked to Coronavirus "continues beyond the next few months of May - June, the impact on GDP should be 3-4 tenths of a point, equal to 5-7 billion euros". This was said by Confcommercio's secretary general, Luigi Taranto, entering the Mise for the table between business and government.

Allianz GI: First quarter in recession
The impact of the spread of coronavirus in Italy, until now limited to the northern regions, on the economy of our country will undoubtedly be very important. Massimiliano Maxia, Senior Fixed Income Product Specialist of Allianz Global Investors, is convinced of this, according to which, considering that the fourth quarter of 2019 had already closed with a negative sign, it is presumable that this will also happen with regard to the first quarter of 2020 " thus bringing our country technically into recession, since it will have recorded two quarters with negative growth ".

The Italian economic heart hit
The fact that the most important regions in the contribution to gross domestic product have been affected - explains Maxia - will obviously have an even more negative effect on this scenario. "What we currently don't know exactly is the size of this impact, although the very first estimates speak of a negative growth for the first quarter of between 0.5% and 1% annualized." In fact - he underlines - today most of the productive and commercial activities of our country are stopped with consequences that are certainly still very uncertain, for example we think about the consequences on tourism, and therefore the picture will be clearer only in the next few weeks, when in any case we hope that the situation will have stabilized or will hopefully be improving.

Negative sentiment
"The sentiment of investors in the very short term - Maxia continues - we believe is destined to remain negative on the global price lists, and therefore not only on the domestic one, given the situation of enormous uncertainty: the contagions have also increased in other countries, not only in Italy , and obviously it cannot be excluded that other European countries may register a much higher number of infected than the current one. Volatility is therefore destined to remain high and to be closely related to the news that will be communicated day by day ".

Government bonds are also suffering
The volatility will in all likelihood remain high also with regard to Italian government bonds. "From a more medium-term perspective, however - concludes the analyst - we recall that the ECB's decidedly accommodative monetary policy can represent a barrier to the excessive spread widening, together with the fact that the search for yield in a world with interest rates negative, especially in the euro area, could be of advantage for our BTP when, hoping that it will be very soon, the situation will have improved ".