MILANO – Italy risks closing the second quarter with zero growth. The Centro Studi di Confindustria writes it in the sup report Congiuntura flash. The dynamics of the Italian GDP in the second quarter – underline the industrialists – “is estimated to be very weak, almost at a standstill” and expectations for the third quarter “are slightly more positive”: industry and construction are down while the moderate growth of services continues driven by tourism. Growth is “curbed by high rates” and also “the foreign driving force for the export of goods has stopped”. After all, Germany “is in a recession” even if according to experts it will not last long.
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Italian inflation – it is written in the Csc report – continues to fall (in June +6.4% per year), thanks to the price of gas just above the minimum (32 euros per Mwh) which finally brought back energy prices for consumption at a moderate pace (+2.1%). In July, the Fed raised the rate in the US to 5.50%, not ruling out new hikes, but the markets consider this to be the last one. Even the ECB decided on another hike in July, to 4.25%, leaving the door open for further moves, judging inflation still too high.
But for Confindustria, “credit is too expensive and scarce”: Italian companies are undergoing a continuous increase in the cost of credit (4.81% in May). This is reducing the stock of bank credit (-2.9% annually in May). The Istat and Bank of Italy surveys show a tightening of the supply criteria (costs, amounts, maturities, guarantees), a demand held back by excessive costs, a significant share of businesses that do not obtain credit (6.0%), above all because waiver due to onerous conditions (56.3%).
To give a boost, supporting the GDP, are the services driven by tourism: “the expenditure of foreigners in Italy in May recorded a +13.2% on 2022 and passengers at the airport were above the levels of 2019 in the second quarter”, he reports the Csc.
Industry, on the other hand, remains weak. In May, production rebounded (+1.6%), “but since the beginning of the year it has in any case contracted a lot (-1.9%; manufacturing -2.4%, with means of transport going against the trend , +3.0%)”. Furthermore, for the industry, the prospects are “weak”.
In particular, the qualitative data suggest that investment conditions deteriorated in the second quarter (balance to -20.4 from -18.1), while business expectations on investment spending in the next 6 months improved but remain low ( 20.4 from 14.9; Bank of Italy survey): the most expensive and difficult credit weighs.
Also worrying is the decline in the export of goods. In May, the reduction in Italian exports eased (-0.3% at current prices); the strong drop in demand from EU countries weighs heavily (-1.7%) while the performance outside the EU is good (+1.2%). Capital goods recorded the sharpest decline (-2.6%), after energy. Negative prospects for the coming months for foreign orders from manufacturing companies, which in July reached their lowest since January 2021 (the balance -20.6). World trade recovered only partially in May (+0.3%).
After all, the focus of the report is on Germany, which is in recession. “There don’t seem to be good prospects for 2023 as a whole – says Csc – forecasters estimate a recession in Germany, largely already acquired (-0.3% on average the Consensus, -0.5% the Bundesbank), due to the drop in household consumption (-1.4%).Prospects for next year are better: a moderate recovery is expected in 2024 (+1.1%, +1.2%).Therefore, it would be a short-lived recession “.
The effects on Italy are obvious given that “Germany is one of the main markets for Italian goods”.
2023-07-29 17:23:10
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