(Tiper Stock Exchange) – Global growth slows, but the economy has proved more resilient than expected. This was confirmed by the governor of the Bank of Italy Ignatius Visco in his speech to Development Committeeon the occasion of the spring meetings of the IMF and the World Bank Washington.
However, the number one of Palazzo Koch warned that the environment is extremely uncertain and downside risks remain on forecasts. Growth and inflation – he added – will continue to be negatively affected by the war in Ukraine. “Globally, we have several factors to consider. Certainly the uncertainty linked to the war is not over”, explained Visco, adding that there is also “a growing global concern of risks of a return to division into blocks“, to which are added the recent ones “financial turmoil” not linked to Europe, but present “risk of contagion” which should be monitored. “These episodes – added the governor – underline the importance of sound regulation and careful supervision of intermediaries’ exposure to interest rate and liquidity risks”.
Visco confirmed that the Italian banks “are doing well” and “are solid”, having sufficient liquidity and good profitability and having made good progress on the reduction of non-performing loans (NPLs).
Visco then spoke of the ECB and the monetary policystating that “the direction is clear” and moves towards raising interest rates, but the problem regard “the speed and size of the possible movementsthat we have to decide only from time to time, based on the information that arrives”.
The governor also confirmed that “Total inflation has come down consistently and this is mainly due to energy prices” and that “the rise that we continue to see in theunderlying inflation it is also to be considered as a reaction delay to energy increases during the past year”.