Time.news – Italian GDP could grow by over 4% in 2021, but a lot will depend on the success of the vaccination campaign. The forecast, substantially in line with the + 4.5% set by the government in the Def and the + 4.2% expected by the IMF, is from the Bank of Italy, according to which it is also crucial to maintain the measures to support the economy until the emergency is over.
The Economic Bulletin of via Nazionale sees a “gradual recovery” of consumption and investments and estimates that in the first quarter GDP remained “almost stable” after a drop, “lower than expected”, of 1.9% in the last three months of 2020. On the labor market front, Bank of Italy notes a decrease in hours you work but also an increase in employment. In general, according to Palazzo Koch, Cig and stop layoffs have saved 400,000 jobs.
Growth of over 4% possible in 2021
Italy’s GDP could grow by over 4% in 2021, although the scenario is not without risks. “According to international organizations and analysts surveyed in March by Consensus Economics”, notes Bank of Italy, “GDP would expand this year at rates above 4 percent, with a significant recovery in the second half of the year, supported by the global context. . An update of the projections published in last January’s Economic Bulletin indicates that developments in line with these assessments are plausible. “
In the first quarter, GDP remained almost stable
The Italian GDP “remained almost stable in the first quarter of 2021”, states the Bank of Italy, according to which “the recovery in industry would be accompanied by a still weak trend in the service sector”. The qualitative indicators of the economic situation, notes the Bulletin, “provide signs of a strengthening of the recovery for manufacturing and an improvement in the prospects for services, which however still remain weak”.
Recovery depends on vaccines
For Bankitalia, the prospects of the Italian economy “remain above all dependent on the success of the vaccination campaign and on a favorable evolution of infections”. The scenario, “not without risks”, also assumes “that support for the economy is maintained and that the interventions being introduced as part of the National Recovery and Resilience Plan (Pnrr) prove effective”.
Gradual recovery of consumption and investments
In Italy a “gradual recovery” of consumption and investments is expected. In particular, reports Palazzo Koch, “according to the companies, the conditions for investing have become slightly more favorable: a large part of them expect an increase in investment spending in the current year, especially in industry. The qualitative indicators are consistent with an expansion in manufacturing during the quarter, while services remain weaker. “
Even households interviewed by the Bank of Italy “indicate a gradual recovery in consumption intentions, but the propensity to save remains high; most of the savings accumulated in 2020, which is concentrated among households least affected by the effects of the pandemic, are not it would be spent during this year “.
Industrial production grew just under 1% in the first quarter
After the rise in January, industrial production increased by 0.2 per cent in February and “would have fallen in March, reaching levels still almost 3 per cent lower than those prior to the outbreak of the pandemic. In the first quarter as a whole. growth would have been just under 1 per cent. “
Down the hours worked but the number of employees is increasing
With the social distancing measures decided in the autumn, the hours worked in the last quarter of 2020 began to contract again and the use of wage integration tools increased; however, the demand was much lower than in the first pandemic wave. The number of employees has risen, but remains far from the level before the health crisis. In the first two months of 2021, employee positions remained stable. Labor market conditions suggest that wage dynamics remain subdued in the coming months.
Government measures have saved 400,000 jobs
According to the Bank of Italy, the stability of permanent employment was favored by the blocking of layoffs, the Cig and other support measures for businesses: in 2020 there would have been about 400,000 stable jobs protected by these measures. Temporary employment positions fell by around 250,000 in 2020, more than offset by an increase of over 260,000 permanent contracts. The overall number of dependent jobs has declined markedly in private services, among young people and women.
Loan dynamics remain lively
The dynamics of loans to businesses is confirmed as “lively”, with a still high demand for loans guaranteed by the state. The offer conditions remained relaxed. Both the cost of bank funding and the rates on new loans remained unchanged at “very low” levels. The credit deterioration rate increased slightly, although it remained at contained values, also thanks to the effect of the measures to support liquidity.
No to a premature tightening of financial conditions in the Eurozone
In the euro area, a premature tightening of financial conditions would not be justified by the current economic outlook. According to Bank of Italy, “economic activity in the euro area has been affected by a new increase in infections; despite a temporary rise in inflation, the outlook for prices remains weak. The Governing Council of the European Central Bank has decided to increase the pace of securities purchases under the pandemic emergency program, to prevent the transmission of the rise in yields observed on international markets from translating into a premature tightening of financial conditions in the area, which would not be justified by the current economic outlook “.
In general, observes the Bulletin, “conditions in the financial markets continue to be relaxed. The upward pressure on Italian government bond yields coming from the United States markets was countered by the decisions taken by the Governing Council of the ECB and by the reduction of the sovereign risk premium “.
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