La Bank of Italy revises downwards estimates of Italian GDP growth in 2019, bringing them from 1 to 0,6%. The cut, explains the central institute in its latest bulletin, is due to three types of causes, the first two internal and the third external: "More unfavorable data on economic activity observed in the last part of 2018, which reduced the growth already achieved for this year's average by 0,2 points; the downsizing of business investment plans which results from the latest polls; the prospects of slowdown in world trade”. As for the growth projections for 2020 and 2021, they are "0,9 and 1 per cent respectively".
Thus Bankitalia denies the words spoken not even a month ago by Giovanni Tria: “With the new scheme, the government has reduced the GDP forecast for 2019 from 1,5 to 1% – he said last 19th December the Treasury Secretary – I believe that the economy will get back on track and I expect higher growth than we have estimated".
Even more recent, on 11 January, are the statements of the deputy prime minister Luigi Di Maio on the possibility of a new economic miracle: “I believe that a new boom can be born – the words of the grillino political leader to the General States of labor consultants – As, in the sixties, we built the highways, we can build digital highways. We must focus on these new job opportunities”.
Shortly after these sentences by Di Maio, the Istat data on industrial production for November: -2,6% YoY (-19% for the auto sector), the worst drop since October 2014.
In this regard, in the latest bulletin the Bank of Italy also points out that in the fourth quarter it continued in Italy "the weakness of the productive activity. After growth stopped in the third quarter, available economic indicators suggest that activity may have declined again in the quarter. It contributed to the weakening of the summer months the reduction of domestic demand, in particular of the investmentsand, to a lesser extent, the household spending".
As regards the ability of the economic system to finance itself, according to Bank of Italy "the credit supply conditions remain relaxed overall" and "interest rates on loans are only slightly higher than in May, before the emergence of tensions on the market of government bonds. Looking ahead, however, the persistence of the high level of sovereign yields and the cost of bank funding" could continue "to push up the cost of credit. In the latest surveys, companies indicate less favorable conditions for accessing credit”.
