(Tiper Stock Exchange) – S&P Global Ratings has revised upwards the estimates for the Italian gross domestic product (GDP) in 2022confirmed them for next year and cut them for 2024. Forecasts for 2022 have been changed to +3.8% compared to the +3.4% estimate at the end of September, those for 2023 remained unchanged at -0.1% and those for 2024 were revised to +1.4% from the previous +1.5%. This can be read in the rating agency’s “Economic Outlook Eurozone Q1 2023: Reality Check” report, according to which the strong momentum of the European economy will almost completely come to a halt early next year.
“Persistent inflation, a hiring freeze and higher interest rates will clearly be negative,” said Sylvain Broyer, EMEA chief economist at S&P Global Ratings. On the other hand, a substantial acceleration in wages and strengthening public investment should support domestic demand and steer the economy towards a modest recovery from the middle of next year.
At the end of 2022, the manufacturing production The EU is at an all-time high, even as energy-intensive sectors have reduced activity due to higher costs. The hiring cycle is still strong and is driving consumption.
“On the other hand, the policy rate cycle is probably closer to the end than the beginningbut it’s not over yet,” Broyer added. S&P expects the European Central Bank (ECB) to hike rates another 75 basis points before stalling. In addition, its balance sheet could shrink by around €3 trillion over three years This would leave the balance sheet close to €6 trillion at the end of 2026, or €1 trillion higher than the pre-COVID-19 level.
S&P points out that i risks for the base forecast for the Eurozone are still “mostly on the downsideboth in terms of the extent of the contraction during the first half of 2023 and the strength of the subsequent recovery”. They concern a possible resumption of the energy crisis, a wage-price spiral leading to much higher interest rates, “perhaps so messy”. The rating agency expects eurozone GDP growth of 3.3% in 2022, 0% in 2023 and 1.4% in 2024.