Italy restarts: GDP estimates + 6.1% in 2021, but beware of inflation and unemployment

• Bonomi: "Worried about the climate of violence. Confindustria is still condemned for assaulting CGIL"

• Confindustria: "Production growth stopped but prospects remain positive"

• Confindustria, Draghi: "The government will not raise taxes, the money is now given"

• Confindustria Assembly.

  Letta: "We support the government".

  Salvini: "Well Draghi on no to new taxes"

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16 October 2021 The rise in Italian GDP in 2021 is stronger than expected: + 6.1%, 2 points more than the April estimates, followed by a further + 4.1% in 2022

. Confindustria Study Center entitled "Which Italian economy since the crisis?", Which analyzes economic trends and elaborates economic policy proposals to encourage greater growth in GDP, employment, and a reduction in the ratio between public debt and GDP on the basis of four working guidelines: the economic situation and forecasts, trends in industrial systems, geo-economic scenarios, the evaluation of public policies.

"The broad upward revision - reads the forecast report - is explained by the more contained impact of the Delta variant of Covid, also thanks to the effectiveness and capillarity of vaccinations in Italy, which made it possible to relax the containment measures ; and also from the Istat revisions regarding the first quarter.

This robust restart of GDP, equal to over + 10% in the two-year period, after almost -9% in 2020, would bring our economy back to pre-crisis levels in the first half of 2022 , in advance of initial expectations ".

Confindustria's estimates for this year exceed those of the government (+ 6%) and the International Monetary Fund (+ 5.8%), but are slightly lower for 2022 compared to the + 4.2% forecast by the executive and the IMF. Despite the positive prospects, however, the industrialists point out, the scenario "presents some downside risks, which concern various elements of uncertainty: pandemic resurgence and new restrictions, prolonged shortages of raw materials, high inflation and premature rise in interest rates, ineffective management of the PNRR, difficulties in the Chinese real estate market ".

"Investments are the main engine of the Italian recovery: in 2022 they will rise to a level much higher than the pre-crisis level (+ 17.7%)".

"So far, the main contribution - underlines the CSC - has come from investments in construction, residential and otherwise, driven by incentives on renovations and public investments. Investments in plants, machinery and means of transport, on the other hand, are still at compressed levels. , but the recovery will continue thanks to the still high confidence of businesses and the driving force of new public investments. But they will be partly held back by the increase in the prices of raw materials and the difficulty in finding some materials ".

"The dynamics of consumer prices in Italy, which returned to positive territory at the beginning of 2021 and then rose rapidly (+ 2.6% annually in September, + 1.7% acquired for the average change this year, provisional data), will register a stabilization by the end of the year ".

"On average, it will settle at + 1.8% in 2021 (from -0.3% in 2020), with an upward revision of 0.6 points from the April scenario. In 2022 it is expected to fall slightly below this value, at + 1.4% on average, due to the gradual waning of the temporary impact of the oil price increase ".

Unemployment will remain high until 2022. "With employment recovering only slightly, the unemployment rate will progressively rise, returning on average for the year close to its pre-crisis value (9.9%). In 2022, the recovery forecast for employment would tend to reduce the unemployment rate. However, the increase in the workforce will strengthen further (+ 1.3%, after + 1% in 2021) and this will keep the unemployment rate high, which is expected equal to 9.6% ".

According to Confindustria, "since spring 2021, participation in work has begun to point upwards and is expected to rise again in the coming months, because the good prospects for economic recovery will induce more people to actively seek employment.

For Confindustria, "the trend in the unemployment rate in 2020 was strongly influenced by the contraction of the workforce. The latter, in fact, dropped by 892 thousand units (-3.4% per year), as a result of a reduction in the number of employees of 638 thousand units, to which was added a reduction of the unemployed of 254 thousand units.

The decline in the workforce, on average for the year, derives from the collapse of active job search in the first half of 2020, only a partial recovery in the summer quarter and a further slight retreat in the last quarter. Thus the unemployed stood at 9.2% of the workforce, down from 10.0% in 2019, despite the deep recession of 2020 ".

In industry, production rose gradually in the first half of 2021, returning to above the pre-pandemic level in June. More recently, however, "business activity and also business confidence have decreased slightly. Insufficient materials have become a factor of growing obstacle to production: interruptions on the distribution chain and the lengthening of delivery times. In addition, the negative dynamics of industrial activity in the main commercial partners (Germany and France) have adverse effects ".

In detail, during 2021 the industrial production index rose gradually, but at a gradually decreasing pace (+ 1.5% in the first quarter, + 1.2% in the second), returning to June above the level immediately before the pandemic (103.2 in February 2020), but not yet above the 2019 average (105.2 points).

In 2022, the shortage of raw materials, semi-finished products and labor, currently concentrated in some production chains and in some geographic areas, "could penalize economic activity more than that recorded in the current year, which would justify a trend that is still growing but at more contained levels. Overall in 2021, industrial activity in Italy is expected to increase by approximately 10.9% and by 3.5% in 2022, in terms of added value ".

Italian household spending starts again but will still remain far below pre-crisis levels also in 2022. Confindustria estimates an increase in consumption of 4.3% in 2021 and 3.5% in 2022.

"In the second half of 2021 and then in 2022, as already in the spring, a recovery in household spending is expected, especially in services. In particular for expenses outside the home and for travel, penalized until April by the limitations due to the pandemic. private consumption, partly blocked and diverted to durable goods during the lockdown, from May-June 2021 could also be divided into services such as restaurants, accommodation, entertainment, as well as non-durable goods. The partial recovery so far of tourist flows, of foreigners towards Italy and also of Italians abroad, provides growth margins to be exploited for services in the second half of 2021 and then in 2022 ".

According to the CSC, "the increased propensity to save, largely 'forced' until the first quarter of 2021, due to the anti-Covid restrictions, should continue to diminish in the coming quarters, freeing up resources for spending. On the other hand, it is conceivable that it will remain higher than in the past, beyond the forecast horizon. Furthermore, it is unlikely that all the extra savings of 2020 will return to consumption in 2021 and 2022 ". Therefore, the CSC scenario foresees "private consumption still well below pre-crisis levels also in 2022 (-3.7% compared to 2019)". 

"The guard must be kept high both to ensure that the ongoing rebound is high enough to bridge the gap caused by the 2020 recession, and to ensure that the growth rate of Italian GDP from 2022 onwards is solid and lasting. it is the real challenge for Italy ".

This was stated by the president of Confindustria, Carlo Bonomi, presenting the forecast report of the CSC 'Which Italian economy to emerge from the crisis?'.

"The Italian recovery - underlined Bonomi - is well underway but despite the positive prospects the scenario presents some downside risks concerning various elements of uncertainty: from the evolution of infections to the important shortages of raw materials and semi-finished products and consequent pressures on the dynamics of prices ".