In 2015 the Italian GDP will rise by 0,5%. This is the estimate on which the main Italian research centers agree, from Prometeia to Unicredit, from the Ref to the Confindustria Study Centre. Which, if this result really materializes, would finally mean a return to growth after 2014 still seen in decline with estimates ranging between -0,3% and -0,5%. And after the country has recorded three consecutive years of fall with 2013 in the red by 1,9%. For a real cyclical recovery, in the order of 1%, however, it will be necessary to wait at least until 2016.
In recent times, however, GDP estimates have accustomed us to continuous downward revisions with the mirage of a return to growth moved one step further each time. Thus it is not surprising that the last study center to publish its updated estimates (on 29 December), Intesa Sanpaolo, pulls the brakes a little more than the others: the bank estimates a +2015 GDP for Italy in 0,4, 0,6% revised down from +2014% previously estimated. "The greatest caution - notes the bank - all depends on the carry-over effect of a 0,4 that is more disappointing than expected (GDP down by -0,2% instead of -XNUMX% as previously estimated)".
A matter of tenths, of course. That pales against the rounded and well-fed figures from overseas, where the US has just communicated to the world third-quarter growth of 5%, higher than expected. But on which heated debates are taking place throughout the country in a 2014 which for GDP meant the entry into force of new methods of calculation with the inclusion of illegal activities such as prostitution and drugs; the endless controversy over the effect of the 80 euro payroll decided by the Government and the continuous upward revision of the unemployment rate.
THE OIL AND EXCHANGE ASSIST
Will it be the right time? In its update, Intesa, albeit revising its estimates downwards due to the trend in 2014, confirms that it expects a return to marginally positive territory at the beginning of the year and a gradual strengthening of the recovery during 2015. "On the one hand - explain the economists of Ca' de Sass - the evolution of recent economic data in itself signals downside risks on this scenario, as the trend of both real data and confidence indexes is not yet consistent with a recovery and, indeed, would have justified a downward revision of this profile expected for 2015. On the other hand, however, some exogenous factors that have occurred in recent months would in themselves indicate an upward risk on the estimate for 2015”. Intesa refers to the weakening of the euro and the fall in oil prices which in 2014 had a positive impact on Italian growth of 0,3% and which could increase in 2015. "A simultaneous shock of 10% on the exchange rate and on the Brent - Intesa calculates - would have an impact of 0,5% on average GDP growth after one year (however, this impact would fall almost entirely in the following year)" .
A recovery which for Intesa still relies heavily on foreign driving forces, while consumption is slowly recovering (in 2014 it was the only domestic component in positive territory: Intesa estimates +0,3% in 2014 and +0,8% % in 2015). And which will be supported by the initiatives of the ECB and by a slightly expansionary fiscal policy, the impact of which will also depend on the structural reforms and the continuation of the payment of the arrears debts of the Public Administration. A sore point of the Intesa Sanpaolo scenario is the failure to recover investments, expected contract for the seventh consecutive year next year (-0,3%). "Construction - notes Intesa - is still in recession and the leading indicators in the sector signal that a recovery is postponed, at best, to 2016. Instead, we expect a recovery as early as next year for investments in machinery and equipment ( +1%), even if for the most part these should be replacement investments given the degree of obsolescence of the plants after years of contraction in capital expenditure by companies".
If household spending has not fallen in quarterly terms for more than a year, the recovery has been very slow. “Although associated with the more sustained one of exports – the Prometeia economists point out in their Forecast Report – it was not sufficient to set in motion the demand for capital goods, despite the measures adopted by the government to support it and the credit conditions progressively less onerous and less stringent". According to Prometeia, the high uncertainty about future demand therefore continues to condition the investment plans of companies, just as it is delaying the process of restocking.
AAA INVESTMENTS WANTED
However, from the second half of the year, Unicredit experts say, we should see a gradual acceleration in the growth of investments, "when the climate of uncertainty that is currently weighing down on the prospects for domestic demand should partially dissipate, leading to a more marked improvement in indicators of trust”.
For its part, the industrial world shows a certain degree of confidence in the opportunities offered by the new global scenario which "looks better than three months ago": for Italy, calculates the Confindustria Study Center, the drop in crude oil will lead to 2015 a positive impact of 0,3%, the depreciation of the euro dollar exchange rate of 0,35% the greater dynamism of global trade of 0,2%. The sum of these forces equals an additional +0,85%. Here Confindustria, while cutting the estimates for 2014 to -0,5% from -0,4%, confirms the forecast of a 2015% growth in 0,5 with a return to growth in the first quarter of +0,2% . In terms of GDP dynamics, Confindustria expects a gradual shift from net exports to domestic demand with all components starting to rise. Not only therefore a recovery in household consumption. But also of investments, which are preparing for a positive return albeit with a 2015 balance still slightly down to -0,1%, the synthesis of a two-speed recovery: investments in machinery and means of transport, notes the CSC, will rise by 1,52% in 2015 after -13,1% between 2011 and 2014; those in construction will continue to fall further in 2015 (-1,4%; -30,3% since 2008) and will begin to recover in 2016 (+1,4%). So finally in 2016 investments should rise by 1,9%.
“The improvement in the cost and availability of credit and the more favorable economic scenario – explains the CSC – will be able to relaunch the purchase of capital goods in the coming months. At the end of the forecast period, total investments will still be 25,9% lower than in 2007. This profound reduction has a negative effect on growth potential”. The worst ballast to the return to growth at much higher rates, however, is of a very different nature. “Corruption – says Confindustria – reduces private investments and the efficiency of public spending, worsens the quality of institutions and human capital. It is therefore a real brake for economic and civil progress". The CSC has quantified its effects on GDP: an increase of one point in the corruption index is correlated with a decrease in the annual growth rate of per capita GDP by 0,8 percentage points. Therefore, if Italy manages to reduce it to the levels of Spain, its growth rate annually would increase by 0,6 percentage points.
CINDERELLA UNEMPLOYMENT
In a context of highly weak labor market, the recovery of economic activity is in any case destined to be still very fragile. “The main risk – underline the Intesa Sanpaolo experts – comes from the persistent weakness of the labor market: the signs of a recovery in employment, almost entirely temporary, also following the greater flexibility introduced by the Poletti decree last March, are partly recently returned and partially thwarted, as regards the effects on unemployment, by the decline in the inactive, which brought the jobless rate to a new all-time high of over 13%. We expect a stabilization and not a decline in 2015”. After unemployment peaked at 13,2% in the fourth quarter of 2014, Intesa Sanpaolo expects 13% in the fourth quarter of 2015. However, the end of 2015 should finally bring about an acceleration in the labor market. "The recovery of the labor market - Unicredit also notes - will accelerate towards the end of the year, with more sustained growth in employment, albeit in the face of a slow decline in unemployment".
For the Confindustria Study Centre, employment (calculated on ULA, equivalent full-time work units) will start to grow again from spring 2015, after having remained practically unchanged throughout 2014 and in the first quarter of next year at the minimum levels at the end of 2013 (-1 million and 681 thousand units compared to the end of 2007, -6,8%). The equivalent work units will grow by 0,3% in 2015, while they will register a +0,6% in 2016. However, we have to wait until 2016 to see the decrease in unemployment levels. With a workforce expected to continue expanding next year (+0,4%) and essentially stable the following year (+0,1%), the unemployment rate in 2015 will remain anchored at the high levels of the end of 2014 (12,9 %), while it will gradually decrease in 2016, hand in hand with the recovery of employment, recording an annual average of 12,6% (12,4% in the fourth quarter).
