(Finance) – In Italy, GDP would have marginally decreased in the summer quarter. In addition to the slight decline in industrial production, there are signs of a weakening in construction; activity in the tertiary sector, on the other hand, would have remained stable, thanks to the still positive contribution of the tourism and recreational sectors. On the demand side, household spending is held back by the loss of purchasing power due to high inflation. Businesses show greater pessimism on the conditions for investing, connected with the protracted uncertainty linked to the evolution of the war in Ukraine. There are indications of a slowdown in employment. This is the picture that emerges from Economic Bulletin of the Bank of Italy
L’inflation – reads the report – has reached the 9.4 percent in September, continuing to suffer from the exceptional energy price increases and their transmission to the prices of other goods and services. According to the Bank of Italy’s assessments, government measures to mitigate the impact of growing energy expenditure on households and businesses’ budgets contained inflation by around 2 percentage points in the third quarter, in line with what was estimated for the second.
According to the most recent estimates by the Bank of Italy, in a baseline scenario the GDP would increase by 3.3 percent in the whole of the current year, would slow down at the 0.3 in 2023 And would grow by 1.4 in 2024. Consumer inflation it would stand at 8.5 per cent on the 2022 average, falling to 6.5 per cent in 2023, and then settle just above 2 per cent the following year. In an adverse scenario – in which a stoppage of Russian gas supplies from the last quarter of 2022, new energy prices and a more marked slowdown in world trade are assumed – the product would contract by more than 1.5 per cent in 2023 and would return to moderate growth in 2024; inflation would continue to rise next year as well, exceeding 9 per cent, and then fall sharply in 2024.
The bank investigations – notes the report – highlight a further restriction in offer policies, confirmed by the tightening of the conditions for access to credit found in the most recent surveys of companies. The rise in official rates was only partially transmitted to the cost of credit to households and businesses, which overall remains at low levels. Financial market conditions worsened in a context of persistent inflationary pressures, an acceleration in the normalization of monetary policies and a deterioration in the cyclical framework. Government bond yields rose, especially for short-term maturities; compared to the beginning of July, the yield spreads between Italian and German ten-year bonds widened.