GDP Italy, the OECD confirms the growth of 5.9% in 2021

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OECD, Italy’s GDP in 2021 will grow by 5.9%, in 2022 by 4.1%

GDP in the world will contract, but for Italy the future is brighter: according to the OECD, growth in 2021 will be greater than expected in May, up 5.9%. Thanks also to the mild impact of the Delta variant, thanks to the vaccination campaign. And if on the one hand global inflation is aiming to gradually decline, the “short-term risks” are on the upside. Here are all the OECD data, reported by the last interim Economic Outlook.

OECD, the main points of the report:

The global recovery continues, but the pace slows

Global economic growth has grown this year, but its pace has slowed slightly. After -3.4% in 2020, this year the global economy will grow by 5.7%, 0.1% less than in May’s Economic Outlook and in 2022 by 4.5%, 0.1% % more.

According to the OECD, global GDP “has now exceeded the pre-pandemic level, but production in mid-2021 was still 3.5% lower than predicted before the pandemic. This represents a real income deficit of over $ 4.5 trillion and is essentially equivalent to one year of global production growth in normal times. Closing this gap is essential to minimizing the long-term scars of the pandemic through the loss of jobs and income. “

Still uncertainty and downside risks on growth

There remains “considerable uncertainty” and “downside risks” on global growth, including rising inflation. “Faster progress in vaccine deployment or a sharper reduction in household savings would increase demand and reduce unemployment, but could also increase short-term inflationary pressures,” he stresses.

At the same time, according to the OECD “the slow progress in introducing vaccines and the continuous spread of new mutations of the virus would lead to a weaker recovery and greater job losses”. “The difficult policy choices faced by some emerging market economies with high debt and rising inflation also represent a potential downside risk,” adds the Paris-based organization.

Italy’s GDP rebounds, up 5.9% in 2021 and 4.1% in 2022

The OECD estimates a double rebound of the Italian economy this year and the next, respectively of 5.9% and 4.1% after the collapse of 8.9% in 2020, linked to the effects of the pandemic. The OECD increases its growth forecasts for 2021 by 1.4% compared to those of the Economic Outlook of May and raises those for 2022 by 0.3%.

The estimate for the current year is in line with the economic study on Italy published by the OECD last 6 September and substantially in line with the update note to the Def that the Ministry of Economy is preparing to indicate and which will provide GDP growth of around 6% for 2021 and above 4% in 2022, with the update note lower than the + 6% forecast in the government’s Nedef and better than the + 3.5% estimated by the Bank of Italy and the + 3% expected by the International Monetary Fund.

Global inflation will slow down but short-term risks are on the rise

Global inflation is set to decline gradually but “the short-term risks are on the rise”. “Supply pressures should gradually ease, wage growth remains moderate and inflation expectations are still well anchored, but short-term risks are on the upside,” writes the Paris organization, according to which inflation between the G20 countries “should moderate from + 4.5% at the end of 2021 to about 3.2% at the end of 2022, remaining above the rates observed before the pandemic”.

“Inflation has increased significantly in the United States, Canada, the United Kingdom and some emerging market economies, but remains relatively low in many other advanced economies, particularly Europe and Asia,” the OECD notes, noting that “Higher commodity prices and global shipping costs are currently adding about 1.5 percentage points to G20 annual consumer price inflation, accounting for most of the rise in inflation over the past year.”

The “mild” impact of the Delta variant in countries with many vaccinated

“The economic impact of the Delta variant has so far been relatively mild in countries with high vaccination rates, but it has reduced short-term momentum elsewhere and has increased pressures on supply chains and global costs.” The increase in economic growth this year “has been aided by strong political support, the spread of effective vaccines and the resumption of many economic activities”.

Watch out for inflation for accommodative policies

“The accommodative monetary policy must be maintained, but clear indications are needed about the horizon and the extent to which any excess inflation will be tolerated, as well as the planned timing and sequence of any moves towards monetary policy normalization.”

In the Eurozone, the economy improves by 5.3% in 2021 and 4.6% in 2022

The OECD improves its Eurozone growth estimates for this year and next, after -6.8% in 2020. Euro area GDP will grow by 5.3% in 2021 and 4.6% % in 2022, respectively 1% and 0.2% higher than the forecast in the Economic Outlook of last May. These are better figures than the spring forecasts of the EU commission which last July estimated + 4.8% for 2021 and + 4.5% for 2022.

The OECD also predicts that Germany’s GDP, after -4.9% in 2020, will grow this year by 2.9% and 4.6% in 2022, respectively 0.4% less and 0. , 2% more than the May forecast. The GDP of France, after -8% in 2020, will grow by 6.3% this year and 4% next, respectively 0.5% more and at the same level as in May. And the GDP of Spain, after -10.8% in 2020, will grow by 6.8% this year and 6.6% next, respectively 0.9% and 0.3% more than May .

The OECD, on the other hand, is reviewing the UK’s GDP downwards. After -9.8% in 2020, Customization expects the British economy to grow by 7.6% this year and 5.2% next, respectively 0.5% and 0.3% less than in May.

Growth in the United States of America slows, but remains 6% growth in 2021

US GDP will rebound to + 6% this year from -3.4%, thanks to the probable further stimulus to the economy. US growth will be 0.9% lower than forecast in the May Economic Outlook. According to analysts, the US slowdown is linked to the impact of the Delta variant and the increase in inflation on American consumption, as well as the impact of global supply shortages on production. In 2020, the US GDP, according to the OECD, will grow by 3.9%, 0.3% more than the May forecasts.

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