• GDP, Gentiloni: "Pre-Covid growth level for Italy in 2022"

  • Visco: Italy recovery strengthens, + 5% GDP in 2021


July 16, 2021

The recovery is gaining strength in Italy. The economy is experiencing a summer acceleration that will lead GDP to rise by 5.1% over the year. The Bank of Italy once again raises its growth estimates against the + 4.9% -5 in June and the + 5% of two weeks ago pronounced by Governor Ignazio Visco. Of course, it is the caveat of the central institute in the economic bulletin, much will depend on the evolution of the pandemic both in Italy and in the world. In a favorable scenario on this front, the economy could return to pre-covid levels in the second half of 2022 with growth in that year of 4.4% and 2.3% the next and beneficial effects on the labor market that will compensate thus the release of layoffs.

The awakening of the economy can count on several factors, first of all the extraordinary support and recovery measures financed by the public budget and by the European funds of the Recovery plan. If Italy manages to land the planned projects quickly, they will contribute to 4 points of GDP in three years, half of which attributable to the NRP. And yet it will not be only the extraordinary measures that will make the difference.

In fact, the Via Nazionale economic bulletin mentions industrial production returned to pre-pandemic levels, an increase in investments and an awakening in household consumption, also driven by the savings rate accumulated in recent months (+ 17.8% with bank deposits at 2 trillion euros) and that could see the materialization of purchases of durable goods (such as cars) postponed in 2020. Here too, depending on the evolution of the pandemic, consumption could give an even greater boost to GDP growth. The relaxed financial conditions of the ECB will then help. Rates, as the ABI also points out, always travel at historic lows. In June, the average rate on new business recognized to businesses was 1.16% and at 1,44% that relating to home loans and loans continue to grow. The bad debts of the banks have fallen below 18 billion even if it will be necessary to see the negative effect when the moratoriums end and various economic sectors now out of the market will pour their crisis into the balance sheets. The long wave of economic recovery should drive employment, with new hires that will offset the negative effect of the release of layoffs. The impact of the removal of the redundancy freeze measures on overall employment is largely offset by the new hires ", writes the Bank, which in recent months has always considered the measure useful to avoid a major drain in the loss of jobs which has in any case affected the fixed term. For the Bank ofItaly in the next three years the hours worked would increase by more than 11%, returning at the end of 2022 to the values ​​prior to the pandemic. The number of employees is also "expected to expand" in the next few quarters, returning above the pre-crisis levels within the first six months of 2023. "The unemployment rate, rising in 2021 (to 10.5%), is expected to fall shortly afterwards. , standing at 9.9% in 2023.