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Bank of Italy draw your stage on the fate of Economic recovery of the country: coherence with what is defined in the NadefBut pay attention to some key elements such as global demand, consumer confidence, debt, and the effectiveness of reforms.
At the hearing to present the update note to the DEF, the Bank of Italy reiterated the estimate of a drop in GDP of 9.5%, with a “plausible“Impact ofone% of the expansive measures contained in the maneuver indicated in the Nadef.
If it is true that there was one growth of economic activity, the uncertainty about the evolution of the pandemic remains high. by Bank of ItalyIn fact, there are still alarms that should not be underestimated.
The Bank of Italy still sees uncertainty: the scenario
The Bank of Italy shares, in general, the panorama presented by Nadef on the economic recovery of the next three years. However, at the hearing on the update note, the Via Nazionale institute did not fail to highlight the most alarming aspects of the expected recovery in Italy.
What emerges, in fact, is the uncertainty that still blurs the growth estimates and that refers mainly to the unpredictable evolution of the pandemic. In Europe, and in Italy itself, there are risk peaks in daily cases, forcing governments to introduce new restrictions.
No more lockdowns, but still severe measures that could impact financially. And reliable, as the Bank of Italy points out:
“There is a significant risk that the evolution of the pandemic will continue to affect the household and business trust or global demand remains weak “
A concern that arose two days ago from the words of Visco, interviewed by The Corriere della Sera. There is a recovery and the next maneuver should stimulate growth around 6% of GDP in 2021. However, the governor recalled that:
“Much of the drop is due not only to supply, which was reduced due to closures, but also to question. the savings went up because it couldn’t be spent, but also because of theuncertainty. If this persists, the effects can be even more negative. We must do everything possible to reduce it. “
The focus on demand trends is crucial for the Bank of Italy and is based on three factors that are fueling the uncertainty. According to Visco these are:health evolution between the increase in infections and the effective availability of the vaccine; propensity to save, without spending and investing; consumption weakness and demand abroad as well.
To this alarm is also added that of public debt. At the hearing, reference was made to the levels indicated in the Nadef of around 150%, considered dangerous. In the next ten years, therefore, action will also have to be taken to rebalance public finances.
Attention to growth projects and their effectiveness
Bankitalia highlighted that the resources provided by the Recovery Fund they are important to stimulate and introduce new measures of growth.
However, there was a caveat: planned interventions will, in fact, depend “on resources mobilized and the breakdown between budget items, also the project execution schedule and their effectiveness in supporting growth potential ”.
Much attention must be paid to how resources will be deployed – waste and long lead times are prohibited. With this system, second Bank of Italy growth could be even higher.
