The Study Center of Confindustria a forecast report by Title “The Italian economy between rate hikes and high inflation” estimated the GDP 2023 ofItaly in 0,4% growth.
An “modest growth” but "more favorable than assumed just a few months ago" when zero growth was expected. Confindustria therefore banishes the fear of a major slowdown. This is an acquired variation and, therefore, will remain so even if the next four quarters record zero growth. The upward revision for 2023 comes from the better than expected performance in the second half of 2022, despite the energy shock and the global situation. They weigh on the growthunknown rate (The largest and fastest rise since 1999: +3,5 points in nine months), ei consumption of Italian families which will remain almost unchanged in 2023 (+0,2%).
For 2024, however, the estimates speak of a 1,2% improvement thanks to the return of inflation, the less restrictive monetary policy and the improvement in the international context. The reforms of the PNRR and the revival of investments will also play an important role.
Every 1% rate hike knocks the economy down by 0,6%
During his speech at the National Conference of Chambers of Commerce in Florence, the president of Confindustria, Carlo Bonomi, analyzed the Italian situation and the policies adopted by the European Central Bank to combat inflation. Bonomi it was said worried from recent maneuvers of the ECB: “We expect in thelast quarter of the year one drop in inflation. It will be an inflation that will be iaround 5-6%. In the face of this inflation we see ECB policies and they worry us because we have experienced 10 years of negative rates, which was unthinkable: what the ECB is doing is going beyond the correct contrast that needs to be done" and "I would not want the counteracting inflation into a recession. The prescription was right, the operation went well but the patient died”. According to the Confindustria forecast report, in fact, “every 1% increase in the cost of money leads to a contraction in GDP of around 0,6%. The Italian system has handled the situation but "we are aware of the strength of the Italian entrepreneurial system but we must not deceive ourselves" added President Bonomi.
In 2023 slowdown in the Eurozone and the USA, China booms
“We expect a second semester of the year into slowdown, and manufacturing production data unfortunately are already showing a slowdown. And this figure is important because we all know that manufacturing production drives everything else" - explains Bonomi - "there are some factors that make us reflect on what the path will be this year and next year: all the data says that theEurozone and the US will slow down in 2023” unlike the China that after the lockdown "will restart in a very strong way” and dei emerging countries which will register a strong growth.
