• Industry: the recovery strengthens, April + 1.8%, + 79.5% year on year, above the pre-Covid level

  • Istat.

    Unemployment in the first quarter rises to 10.4%

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June 11, 2021 Growth of 4.9-5% this year to 4.5% next and 2.3% in 2023, with the current year being driven by the recovery of investments and consumption expanding more gradually. This is the picture drawn by the Bank of Italy in its macroeconomic projections as part of the exercise agreed with the Eurosystem, of which yesterday the ECB published the estimates for the euro area economy and which is located in the upper part the growth 'fork' indicated by the various institutional forecasters.   



The Bank of Italy tables indicate growth of 4.5%, but with the caveat that, due to the 'cut off' on 26 May, they do not incorporate the data released by Istat on 1 June, which overturned the estimates on the GDP in the first quarter bringing it positive: taking this into account, "growth for 2021 would be higher by more than half a percentage point".



Unemployment estimates: in 2021 10.2%, in 2022 9.9%

The Bank of Italy has improved the forecasts on the labor market in the Peninsula between now and 2023. Now it estimates an unemployment rate that from 9.3% last year will limit growth to 10.2% on 2021, and then be limited to 9.9% in 2022 and 9.5% in 2023. The figures are contained in the economic projections for Italy, prepared by the institution as part of the last coordinated Eurosystem exercise. In the previous similar forecasts, dating back to January, the Bank of Italy estimated unemployment in 2021 at 10.5%, in 2022 at 10% and in 2023 at 9.5%. On the number of employees, after minus 2.8% in 2020, the establishment of Via Nazionale now expects a further minus 1.2% this year, a plus 1.8% next and plus 1.9% in 2023 . Last January it indicated minus 0.9% on 2021, plus 1.7% in 2022 and plus 1,3% in 2023.



Number of employees at pre-pandemic level by the end of 2023

On the labor market, the return to growth is reflected in a similar increase in hours worked, which by 2023 return to

pre-pandemic

levels, notes the Bank of Italy in its projections macroeconomic. The number of employees, which in 2020 had reduced much more modestly than hours thanks to the employment support measures, is expected to grow again from the current quarter; after an average decrease of 1.2 per cent this year (reflecting the fall already recorded in the first quarter), it would return to 2019 levels by the end of the forecast three-year period.



From government measures and Pnrr +4 GDP points in 2021-23

The government support measures and European resources, starting from those envisaged by the National Recovery and Resilience Plan, will raise the level of GDP by about 4 percentage points in the three-year period 2021-2023 and half of the impact is attributable to the effects of the NRP . The Bank of Italy notes this in the economic projections by estimating a return of GDP to pre-Covid levels by 2022. "This growth profile - explains Bankitalia is heavily dependent on the effectiveness of the support and relaunch measures financed with the national budget and with European funds, including those outlined in the National Recovery and Resilience Plan (Pnrr). In the context, the whole of these measures raises the level of GDP by about 4 percentage points in the three-year forecast period. Half of this is attributable to the effects of the Pnrr impact;this reflects the hypothesis that the interventions, in particular the investments, are carried out without significant delays and are effective in supporting the production capacity of the country ".



Inflation on a moderate rise to 1.3% in 2021

Inflation will return to growth this year driven by the global recovery but will remain at contained levels in the three-year period 2021-2023, notes the Bank of Italy in its economic projections. "After the slight drop in prices in 2020 - explains Bank of Italy - consumer inflation would return to positive, reflecting the restart of the global economy, the increase in the price of raw materials and the progressive reabsorption of the margins of unused capacity, but would remain contained, equal to '1.3 percent this year and at similar levels over the next two years (1.2% in 2022 and 1.3% in 2023) ".