The "stunted" growth of the Italian economy will lead to a GDP increase of less than 1% this year. The governor of the Bank of Italy said it, Fabio Panetta, guest of the Abi executive led by Antonio Patuelli. Positive news arrives oninflation, back "in the right direction", and on the banks, currently "in a positive phase". But there is no shortage of risk factors, starting with the Houthi attacks in the Red Sea.
Panetta: “Italian GDP below 1% in 2024″
“Right now we are in a phase of cyclical slowdown: last quarter we grew as slowly as Europe", said Panetta speaking to the Abi. “Europe is in a phase of chronic weakness, Italy has scraped together a few decimals of growth while at a European level the change in GDP has been negative”.
The governor of the Bank of Italy added that the push provided by consumption was positive "that they increased as a result of the stability of employment which is growing despite the difficulty of the times". The investmentsinstead, they are showing “a slowdown” as a result of monetary restriction.
Speaking in percentage terms, according to the latest estimates from the Bank of Italy, "what we foresee is a growth below 1% in 2024 and that 2023 ended with growth around 0,6-0,7%, and a return around 1% in 2025 which is higher than potential and we believe that investments, which are the engine of the economy, they will remain weak.
Panetta: “Inflation is back under control, but monetary tightening is weighing on the economy”
“The positive news is that inflation in Italy is under control: it has returned permanently below 2% and we expect it to remain below 2% in the three-year period up to 2026. Three years which are "the horizon in which the ECB calibrates its interventions".
The governor of the Bank of Italy then explained that the "main reason" for the economic slowdown, in addition to the difficulties of the Chinese economy and the bottlenecks of global supply chains, is “monetary restriction” implemented by central banks and recognized that we are in “one of the rare phases, like in the 70s” in which central banks tighten monetary conditions with “very strong” effects on demand.
“I am convinced – continued Panetta – that the current disinflation is strong. I won't launch into predictions about when "the ECB rates" will be cut because I don't know and if I knew I wouldn't tell you", she added. A possible prediction instead came this morning from the president of the ECB, Christine Lagarde, who from Davos he made it known that the first cuts will probably arrive during the summer.
Panetta: “Positive phase for the banks”
Speaking of the banks, the number one on Via Nazionale acknowledged that "since I returned, I looked at the numbers Italian banks and it is a phase in which they are doing well, with adequate liquidity, capital ratios in line with European ones and the famous low NPLs, both in terms of consistency and flows". Panetta, however, warned: “without wanting to be a prophet of misfortune, we must remember that when things go well risks arise”.
Not only, “there is a lot of liquidity”, but the ECB is tightening monetary conditions. The banks will therefore have to return to "competing on collections" and already "we are starting to see some tension" in terms of bad debts and we will need to be careful "if the weak phase of the economy continues".
On a general level, the governor of the Bank of Italy specified that "at the moment we do not see a macro impact" from the events in Red Sea “but we can't rule it out.”
