We have been too optimistic. The government and the Bank of Italy have so far said that to return to pre-Covid economic levels it will be necessary to wait until the end of 2022. TheEuropean Union, however, does not agree. In the latest forecast report drawn up by the Commission - and presented on Thursday in Brussels by Commissioner Paolo Gentiloni - we read that, as a whole, "the EU economy will be just below its pre-pandemic level by the end of 2022 , but unfortunately this will not be the case for all Member States”. In short, the average hides significant differences between countries.
In particular, “among the major Member States – continues the document – it is expected that only Germany and Poland to reach or exceed pre-pandemic GDP levels by the end of 2022".
Overall, “nearly half of states are not expected to recover to pre-pandemic GDP levels by the end of 2022”. And among them, unfortunately, there is also Italy, which "is recovering from a deep economic depression - the forecast report continues - but the pandemic and its negative repercussions persist and weigh on economic activity, especially in services". Therefore, "the recovery is unlikely to be sufficient to return real output to pre-pandemic levels by 2022".
Let's get to the numbers. The European Commission has raised its estimates on the trend of Italian GDP of 2020, bringing them from -11,2% indicated in July to -9,9%, thanks to rebound beyond expectations recorded in the third quarter. The predictions relating to the 2021, however, have been revised downwards from +6,1 to +4,1%, due to the negative impact of the second wave of infections and the new limitations that the government had to introduce.
For the price trend, Italy should end 2020 in live deflation (-0,1%), to then recover an inflation of 0,7% in 2021, which will rise to 1% the following year. Last July, the Commission had forecast a better performance: 0% in 2020 and 0,8% in 2021.
