Reduced growth, decreasing but still high inflation and stagnant salaries: these are the Forecasts black in color for theItaly illustrated today, Monday 11 September 2023, in Brussels by European Commission. In 2023, our GDP will grow by 0,9%, while in 2024 it will stop at 0,8%, in both cases, it is a downward revision compared to previous estimates (1,2% and 1,1%). And the prospects are not positive for the rest of the EU and the Eurozone either. Above all, the performance of Germany e Holland: German GDP could register -0,4% against a growth of 0,2% estimated a few months ago. The rebound in 2024 will be less sustained (1,1% versus 1,4%). However, the biggest drop is expected to be recorded by the Dutch economy, which in 2023 is expected to grow by just 0,5% against the 1,8% expected in the spring. Data that puts the whole of Europe in difficulty with some exceptions such as Spain. The commissioner revealed the new economic estimates at the end of the summer Paul Gentiloni.
“Although our economy remains on a growth path, uncertainty remains high and we must carefully monitor risks. The implementation of reforms and investments under our Recovery and Resilience Instrument remains key to keeping the EU economy on the right track,” Gentiloni said at a press conference, adding that “we need to pursue prudent and pro-profit fiscal policies. investments, in sync with the continued efforts of our central banks to contain inflation. Finally, we must work determinedly to conclude an agreement on the reform of our fiscal rules by the end of the year."
Economic forecasts for Italy
“The economic growth of Italy – writes the European Commission – began to slow down last year, halting the post-pandemic recovery that had brought growth to 7,0% in 2021 and 3,7% in 2022. After a recovery in the first quarter of 2023, GDP decreased by 0,4% on a quarterly basis in the second quarter, driven by the decline in domestic demand, in particular in construction investments”. Here, Brussels points the finger at the stop at the Superbonus: “The gradual elimination of the extraordinary and temporary incentives for building renovations decided during the pandemic, which have strongly boosted construction activity in the last two years, has contributed to this development.” This year, however, GDP is estimated to grow by 0,9% (from 1,2%) and by 0,8% in 2024 (from 1,1% in the spring).
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Salaries stuck, inflation still high
The other point made by Brussels concerns wages: "It is expected that a very gradual increase in wages, together with still favorable employment conditions, will support a modest increase in private consumption throughout 2024". Simply put, Italians' salaries are struggling to keep pace with the increase in consumer prices: this year, theinflation it will be 5,9%, slightly lower than the latest forecasts, but still higher than the euro area average. In 2024 it will be 2,9%. In short, a situation that the government will have to take action on starting next year Maneuver.
Downward growth forecasts also for the EU and the euro area
The European Commission has revised the growth of the EU economy setting it at 0,8% in 2023, against the 1% expected in the spring forecast, and at 1,4% in 2024, from 1,7%. It also revised growth estimates downwards for theeuro area setting them at 0,8% in 2023 (from 1,1%) and 1,3% in 2024 (from 1,6%). At the same time, inflation is expected to “continue to decline”: the harmonized consumer price index of consumer prices is expected to reach 6,5% in 2023 (compared to 6,7% in the spring) and 3,2, 2024% in 3,1 (compared to 27%) of the 5,6. In the Eurozone, inflation is forecast at 2023% in 5,8 (compared to 6,4%); in Germany at 2023% in 2,8 and 2024% in XNUMX. Unlike Germany and the Netherlands, our country, however, has one more weapon, the Pnrr funds. The Spain, another major beneficiary of the Recovey fund, goes against the trend compared to the rest of the Eurozone: in 2023 growth will be 2,2%, up compared to the spring estimates (1,9%). Even the forecasts of France they are better than those estimated a few months ago: an increase of 1% against the 0,7% of previous forecasts.
On Thursday 14 September, the board of the European Central Bank will announce whether or not it intends to proceed with a further increase in interest rates. The performance of the European economy is causing more than a few concerns. And with inflation which, although decreasing, remains quite high, the Commission itself does not rule out a worsening of the situation in the coming months.
