(Finance) – TheItalian economy shows signs of a moderate recovery in the first quarter of 2023, after the slowdown of the last three months of last year, while theinflation is declining even if the components background that affect the “shopping cart” are still growing. L’occupation it strengthens, above all thanks to open-ended contracts, but imbalances continue to appear between the demand and supply of labor which are holding back production.
According to April economic report from the Parliamentary Budget Office (PBO), uncertainty is reduced in the short term for the Italian system, while in the medium term the downside risks to growth and upside risks to inflation prevail. In addition to conflict in Ukraine the potentially adverse elements primarily concern the implementation times of the PNRR, the global financial tensions, the persistence of inflation and climate and environmental risks.
Faced with a conflict in Ukraine that does not appear to be stopping, theglobal economy show signs of resilience, adapting to the changed international scenario. European countries have reduced the dependence from imports of russian gas, both by diversifying sources of supply and by reducing overall consumption. In fact, the EU’s dependence on Russia went from almost 50 percent in mid-2021 to just under 13 percent in November 2022 in just a few months. Thanks also to a mild winter, tensions on the gas market gradually eased and at the end of March the price per MWh had returned to around 40 euros, i.e. the prices at the end of July 2021.
The decline in the prices of energy raw materials it has favored the decline in inflation in Europe: since the peak recorded last October, when prices in the euro area had increased by 10.6 per cent, inflation has steadily decreased. According to Eurostat’s preliminary estimates, inflation fell to 6.9 per cent in March, with a drop of more than one and a half percentage points on the previous month; the energy goods component was negative, for the first time since February 2021.
However, the progressive increase of prices it has now spread to the various goods in the basket, especially food. However, the downward trend is not sufficient to conclude the process of normalization of monetary policies. Central banks remain vigilant, depending on available data. Fiscal policies of EU Member States will also move towards unwinding the imbalances, which have accumulated following the pandemic and the conflict in Ukraine.
Last year the Italian GDP grew beyond expectations, with a final increase of 3.7 per cent, higher than the main European partners for the second consecutive year, thus continuing the post-pandemic recovery phase that began in 2021. Growth was driven in particular by the private domestic demand, i.e. come on consume from the families and give it gross fixed capital formation, and also from exports. The final quarter of 2022, however, recorded a slight bending (-0.1 per cent compared to the average for the summer months). In 2022, private consumption grew by almost five percentage points compared to 2021. After the leap forward in the central quarters of the year, household spending decreased by a significant amount in the autumn (-1.6 per cent), reflecting the of the heavy loss of purchasing power of households caused by price increases.
Based on preliminary information, in the January-February two-month period of this year theoccupation would have continued to expand (0.3 per cent compared to the previous three months) driven in particular by the pull of employed people to indefinite time and of the autonomous. The employment rate (15-64 years) rose to historical highs (60.8 per cent), also due to the decline in the active population, but is still far from the prevailing values in the euro area. The recovery in women’s participation in the labor market also contributed to the improvement, essentially returning to pre-pandemic values.
The imbalance between request And offer however, it remains broad and constitutes a brake on the production. According to the Istat survey on the capacity used and the obstacles to production of manufacturing firms, the share of firms that have faced obstacles overall is decreasing, but among these the shortage of manpower is intensifying.