Il 2024 brought a bit of everything to the global level: expansion, uncertainties e signals conflicting. In particular, the tightening of the duties by the United States, under the new administration Trump, worries the Italian small and medium enterprises, for which the US market is fundamental. The alarm was raised by the latest Bankitalia economic bulletin which underlines how the increase in duties could hit not only those who export directly, but also those who supply intermediate goods destined for the USA, generating a spiral of uncertainty that could slow down investments.
Bankitalia's warning on US duties
The United States is in fact the second largest market for the Italian exports, with a significant increase in sales, reaching 2023 billion euros in 63 (11% of the total). This success was partly due to a weaker euro and strong American demand. However, political uncertainty, especially following the presidential elections, raised fears similar to those of the war commercial with China, jeopardizing growth in sectors most dependent on the American market such as shipbuilding, aerospace and pharmaceuticals. Italian SMEs are the most vulnerable, considering that the US market constitutes approximately 7% of their turnover and 27% of exports.
The Global Economy in 2024
Meanwhile, the global economy continued to expand, but at different speeds. The States Uniti, thanks to consumption, have seen a growth robust, with a +2,8% of GDP for 2024. In China, however, the real estate market crisis has dampened domestic demand, leading to a weaker growth, despite a slight recovery in the fourth quarter. In Europe, manufacturing continued to suffer, but services showed signs of slowing especially in advanced economies.
In the third quarter of the year, theeuro area registered one growth modest, with consumption and investment affected by a loss of household confidence and tighter financing conditions. However, exports were positive and helped limit the slowdown in domestic demand. The ECB adopted a cautious policy, cutting interest rates, but forecasts point to moderate price growth, with inflation expected to remain under control in the coming years. inflation expectations remain stable, and the market expects a stabilization around 2% by 2025.
Even major central banks, including the Federal Reserve, have adopted accommodative policies. In December, US inflation rose to 2,9%, while core inflation fell to 3,2%. The Federal Reserve cut interest rates by 25 basis points, with further cuts expected in 2025. In the UK and Japan, inflation fell to 2,5% and rose to 2,9%, respectively. The Bank of England and the Bank of Japan kept rates unchanged.
In terms of prices, the Petroleum saw a slight increase, stabilizing around $80 a barrel, while the gas design has seen significant fluctuations, mainly due to seasonal factors and geopolitical tensions, with Russian gas continuing to withhold flow to Eastern Europe.
The effect of interest rate cuts
Il official rate cut is making his presence felt effects on banking costs, with a reduction in the cost of collection and credit, as confirmed by Via Nazionale.
The rate cut has impacted banking costs, with a reduction of collection and credit. According to Bankitalia, between August and November the marginal cost of funding fell by 26 basis points, reaching 1,7%. Although the rate on current account deposits remained stable at 0,5%, funding continues to contract (-2,2% on an annual basis), with a partial compensation thanks to alternative sources of financing.
Italian Economy: A 2024 of Light and Darkness and Prospects for 2025
On the national front, Italy has experienced a 2024 in chiaroscuro. The production remained stagnant in the third quarter, with the manufacturing still in difficulty, with a decline in the added value of industry (-1%), but some sectors such as services and construction, driven by the PNRR, gave a small boost (+0,3% and +0,2%, respectively).
I consumption of families have shown a sharp increase, but have been accompanied by a weakening of confidence and an increase in the propensity to save, aided by the appeal of high bank rates. The Real Estate Market saw an increase in prices, but demand remained subdued, with only signs of improvement in the residential sectors. Overall, the real estate sector saw a contraction in commercial activity, marking a decline for the first time since 2021.
Le exports did not take off as hoped. Although sales to the Eurozone increased, those to the United States and the United Kingdom fell. companies are bracing for possible tariff increases, but external demand remains weak, although orders could accelerate in the short term due to uncertainties related to international trade policies.
With regard to the balance of payments, Italy recorded negative net foreign demand, with exports declining and imports rising. However, the balance showed signs of strength thanks to a surplus in the financial account, fueled by foreign investments in Italian government bonds. Italy's net foreign credit position strengthened further, reaching €265,2 billion, while the debtor position on the Target system decreased, contributing to an improvement in the foreign position.
Le forecasts for 2025 are more optimistic, with a Italian GDP growth forecast at 1% annual between 2025 and 2027. This expansion will be supported by public investment plans and a more sustainable recovery in consumption, despite persistent global uncertainties, such as international tensions and the performance of the US market, which could still negatively impact the Italian economy.