La Bank of Italy halves forecasts on the progress of the Italian GDP. In the latest economic projections, the central institute estimates a recovery at a moderate pace in the second half of 2019, with a GDP that, adjusted for working days, should grow this year only by 0,3%, against the +0,6% calculated in January.
The macro projections for 2019-2021 also contain downward revisions for the next two years. According to via Nazionale, in 2020 GDP will grow by 0,7% (against the +0,9% expected six months ago) and in 2021 by 0,9% (from +1%). The revision compared to January, reads a note, "mainly reflects the greater weakness in foreign demand observed in recent months and the continuation of conditions of high uncertainty detected in business surveys".
The Bank of Italy adds that they will mainly contribute to the growth of the GDP two factors: household consumption, which will benefit from budgetary policy measures to support disposable income, and exports, which will grow in line with foreign demand.
The dynamics of private investments on the other hand, it should be weak, held back by uncertainty about demand prospects and a gradual increase in financing costs.
The Bank of Italy also explains that the accumulation of productive capital it will decrease in the two-year period 2019-20 until it becomes stagnant in 2021.
According to via Nazionale experts, employment will expand to a limited extent, especially in the first two years, also reflecting greater exits from the labor market due to the introduction of new forms of early retirement, which, in line with the regularities observed in the past, would only be partially replaced by new hiring.
