Bank of Italy: "The country's economy is solid"

In a

of deterioration, the risks for

have also increased in Italy, however overall the banking system, households and businesses in the peninsula are now more solid than in past episodes of turbulence.

This is the photograph taken by

.

According to this six-monthly study, as for the other countries of the euro area, the increase in risks is mainly determined by the persistent

instability , by the increases in the prices of energy raw materials, by inflationary pressures and by the worsening of growth prospects.

Global economic activity slowed down in the summer period and the

in the major economies have been revised downwards for next year.

The world economic cycle remains strongly conditioned by high inflation, by the difficulties of energy and food supply caused by the continuation of the conflict in Ukraine and exacerbated by drought, as well as by the slowdown of the Chinese economy. 

In this context, the central banks of many countries, including the

in the euro area, are continuing the process of normalizing monetary policy to counter inflationary pressures.

Conditions in global financial markets have deteriorated since last spring.

In a context of progressive slowdown in economic activity and a rapid rise in long-term interest rates, episodes of high volatility and deterioration of liquidity have occurred in the main advanced economies, including on the government bond markets.

Tensions in the raw materials sector, continues the

, now underway for almost a year, have led to difficulties for some financial intermediaries and for various energy companies operating on the commodity derivatives market.

Tensions could still arise, although some countries have intervened to contain the problems.

In Italy "it will be important to maintain control of public spending and achieve a significant and stable increase in growth potential, also leveraging on the effective and timely implementation of the

, in order to be able to consolidate the trend towards a reduction in debt and deficit ratios on GDP, says the Bank of Italy and underlines that public finance conditions benefited from the economic recovery of 2021 and the first nine months of 2022. And according to the establishment of

, the yield differential between Italian government bonds and the German ones (the spread), after a significant widening in recent months, has returned to the levels of last spring. 

The Institute underlines that the

contained in the Macroeconomic projections for the Italian economy do not incorporate the data on GDP for the third quarter (up by 0.5 per cent), higher than expected, which would lead to a slight upward revision of the forecasts for 2023. "The estimates do not differ significantly from the trend ones contained in the Update Note to the 2022 Economic and Financial Document published at the beginning of November (0.3 per cent in 2023 and 1.8 per cent in 2024) and from those of the other main analysts", emphasizes Bankitalia

Governor

, interviewed by Class CNBC on the sidelines of the Payments Show, commented on the measure relating to the cash ceiling: It's a very political issue that needs to be discussed from a technical point of view and we have a risk assessment, for example , on tax evasion and use for unlawful purposes on which I believe we need to focus and forcefully underline the importance”.

"It must also be said - he adds - that I expect the rules to be valid for everyone and therefore harmonization at the European level is something to be hoped for".

And again: "We are increasingly going digital, a progress that will take place in Italy as has already happened in other countries, but this does not mean that currency in circulation will disappear"

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Ignazio Visco, 24112022