(Finance) – “Buildings And services fueled the good dynamics of Italian GDP in the 1st quarter. The positive signals on the consumption of goods, together with the rate cut, anticipate a smaller decline in industry in the 2nd quarter. The growth of tourism continues, which fuels net exports, together with the decline in imports. There remains low business confidence and problems in transport and energy prices.” Thus the Confindustria Study Center summarized the performance of the Italian economy in the first months of the year in the June Flash Economy.
The analysis recalled that the ECB in June he decided on the first rate cut, to 4.25% (from 4.50%), as expected. “But now markets only expect another -0.25% by 2024 because inflation is still high; Then -0.50% in 2025. Europe moved before the FED, which is holding firm US rates (at 5.50%). So far, there have been no significant impacts on dollar/euro exchange rate (stable at 1.08). Sovereign spreads were little affected by the elections EU (BTP-Bund at +141 points on June 11th, from 132 on the 7th)”, underlines the report.
The analysis found that in Italy L’inflation is stably low (+0.8% per year in May), thanks to decreasing energy prices (-11.7%) and core prices falling to +2.0%, on the ECB threshold. “In the’EurozoneOn the other hand, inflation is rising: +2.6% total (from +2.4% in April and May), +2.9% for the core. In the USA things are even worse: at +3.3% in May (it was +3.1% in June 2023) and +3.4% the core measure”, reported the study.
“The oil price it drops but remains high: in June 78 dollars a barrel on average (it was 90 in April): this tends to moderate consumer prices of fuel – the analysis continues -. On the contrary, the European gas price is going in the opposite direction, rising to €34/mwh in June, from a minimum of 26 in February: this will impact on electricity and gas prices for families and businesses.”
For what concern industrial sector in the 1st quarter the Confindustria Study Center recorded a -0.4% in terms of added value and in April a drop in production (-1.0%), although RTT indicates that turnover has recovered February levels. In May, the HCOB PMI fell (45.6 from 47.3) and the business confidence remains stuck at modest values; the CSC survey of large companies, however, shows an improvement in production estimates in the current month, consistent with the timid rise in short-term expectations (Istat).
Finally, regarding the requestin the 1st quarter both i consumption (+0.3%), which investments (+0.5%, but -1.5% in machinery-equipment awaiting Transition 5.0). “The indicators improved in May: the family trust has recovered the level of the beginning of the year; orders from capital goods companies partially recovered. A lower cost of credit will play in favor, although the expected decline is limited; vice versa, investments in construction are expected to slow down”, underlined Confindustria.