THEItalian economy is meant for one sharp slowdown in 2023. This is supported by the Parliamentary Budget Office, which in its latest Report on the economic situation has revised the estimates on the trend of the GDP in the current two-year period. If the forecast for 2022 they improve slightly – passing to 3,1%, from 2,9 elaborated last April, above all due to the expected contribution from domestic demand, which should benefit from a still expansive budgetary policy – those relating to 2023 suffer a cut of 1,2 percentage points compared to spring estimates, collapsing to 0,9%. The negative review, explains the Upb, is primarily due to the continuation of the conflict in Ukraine, which is proving to be much longer than initially expected and will bring with it a further deterioration in foreign demand and a greater persistence of inflation.
GDP 2022-23: 1,5% depends on investments by the PNRR
In the calculations of the projections, the full implementation of the investments envisaged by the PNRR, which, according to the calculations of the Parliamentary Budget Office, should support the GDP for over 1,5 percentage points in 2022-23. Therefore, if Italy were to abandon the path traced in agreement with Europe, its economic prospects would change drastically.
In the basic scenario considered by the PBO, the component of construction (expected to grow by 7,0% on average for the two-year period) should continue to be the most important driver of investment spending. As for the consumption, are expected to increase by 2% this year, while in 2023 they should slow down (+0,8%) due to the weakening of labor income.
What would be the risk of stopping gas from Russia
In this context, the main downside risk is represented by the evolution of the war in Ukraine, its duration and the impact it could have on the prices and availability of raw materials, especially energy and agricultural materials. The forecasts of the Upb, in fact, do not take into account a possible disruption of gas supplies from Russia. If this scenario materializes, the consequences for the Italian economy would be very heavy, both on growth and on inflation.
In particular, according to recent Italian and foreign institutional analyses, the complete closure of the Moscow tap could lead to a reduction in growth of between 0,7 and 2,8 percentage points and in 2022 between 1,5 and 3,8 points next year. The impact oninflation instead it is quantified between 1,3 and 1,5 percentage points for this year and between 2,0 and 6,3 points for 2023.
"It should also be considered that the order of magnitude of the effects of a reduction in gas supplies derives from a multiplicity of factors and conditions of various kinds and which are difficult to predict - specifies the Upb - Depending on these conditions, some of which institutional and regulatory environment, the effects of such a shock could vary significantly".
