The Italian economy continues to slow down while, conversely, risk factors recorded a further acceleration. In the first part of 2018, the setback recorded by foreign exchanges compromised the progress of our economy, slowing down its trend. The most recent cyclical indications indicate that the signs of a slowdown have consolidated, above all in industry, which remained "at a standstill" in the summer quarter. Industrial production stagnated in the first half of the year and according to estimates the same trend was recorded in the months of July, August and September. Household confidence is almost stable, while that of businesses continues to deteriorate and uncertainty increases.
This the gloomy picture drawn by the Parliamentary Budget Office in the economic note of October 2018 published today, 22 October.
“The PBO diffusion index, which measures the extent of the recovery among the various manufacturing sectors, is continuing to fall and is now below the 50 percent threshold. Uncertainty is starting to weigh on the confidence of households and businesses”, reads the note from the PBO.
As growth slows, risk factors continue to rise. Not surprisingly, for the third quarter of 2019, the estimates of the parliamentary budget office speaking of un GDP growth of 0,1 per cent, a percentage which, among other things, should also be repeated in the last three months of 2018. “This profile – continues the PBO – would lead to an increase in GDP in 2018, adjusted for the calendar, of 1% per cent. Considering that the current year has three days worked more than 2017, the variation in the annual accounts could amount to 1,1 percent”.
As far as risks are concerned, the PBO particularly focuses on international "dangers". arising from the trade war and developments in global protectionism. The trends of the commodity markets could also contribute to this scenario. “Moreover, the uncertainty of sudden increases in the risk aversion of financial market operators remains strong, which would rapidly have repercussions on the macroeconomic framework of the Italian economy”, concludes the note.
