After years of recession, Italy is starting to grow again. Although the results for the third quarter of 2015 disappointed expectations, 2016 promises to be positive thanks to a marked increase in domestic demand.
These are the forecasts of the chief economist for the EMEA area of the S&P 500 Jean Michael Six announcing during the press conference to present the 2016 outlook held in Milan. After 0,7% in 2015, the agency expects GDP to grow by 1,3% in 2016 and 1,4% in 2017.
At this point, therefore, according to Six, the greatest enigma regarding Italy will be another: the improvement in domestic demand will correspond to a greater push on the front business investment?. “The big risk – said Six – and obviously this isn't just a problem for Italy, is that global uncertainty and volatility could lead companies to postpone investments until better times. For this reason, it will be of crucial importance to keep the evolution of business sentiment under close observation, which is currently positive”.
Even the now famous could intervene to ballast the repercussions non-performing loans, the amount of which has now reached 20% despite attempts to remedy the situation: “unlike countries such as Spain where the problem was addressed at the time through the creation of a bad bank”.
"For a significant improvement in the NPL situation to be recorded - continued S&P analyst Mirko Sanna - an acceleration of the economy will need to be recorded and at the same time a more effective market will be created for the disposal of non-performing loans . The measures taken so far by the government have been positive but it will take time for them to take full effect and any further incentive measures will be welcome.
At the European level, Six believes that growth will remain sub-par, also paying the price of the collapse in crude oil prices, a phenomenon that now seems to have turned the road ahead to achieve inflation and growth targets uphill.
Nevertheless, to date the collapse of oil, together with quantitative easing and the domestic policy measures implemented by Italy (Jobs act, tax relief and spending reviews) seem to have done Italy good. "Reforms such as the Jobs Act - said the chief economist - have started to have some positive effects and this shows that when reforms are well orchestrated they can have positive effects on growth".
