BRUXELLES – The updated economic forecasts from the European Commission arrive and all the spotlight is now on the possible technical recession in the eurozone. That is, if after the decline in the third quarter (GDP -0.1% even in the latest Eurostat photograph), the community executive says to expect a slowdown in GDP in the last three months of the year, and above all if it cuts the expectations. The slowdown in the economy is, however, already widely expected and could even be a positive surprise if the data ultimately turns out to be higher than expected, as suggested today by new German data which, completely surprisingly, turns clear.
However, the Commission’s estimates will be carefully weighed, especially with respect to the GDP projections for next year, with the new uncertainties posed by the war in the Middle Eastand the growing risk factors especially from gas and oil prices. Italy, however, remains in suspense for the response that will arrive on Friday evening from the rating agency Moody’s: today it assigns the country a rating (Baa3) just above the threshold considered ‘investment’ (investment grade) and has a judgment with negative prospects (‘negative outlook’): in the event of a rating cut, the country’s issues would become one of the Big Three of the junk bond rating (‘junk bond’), a decisive judgment for the moves of institutional investors ( such as pension funds, banks or insurance companies).
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The European Commission’s forecasts are the first complete ones to be released by Brussels since May, after data only on GDP and inflation for six countries (including Italy) and the Eurozone and EU communicated on 11 September. In this latest update, Palazzo Berlaymont had estimated GDP in 2024 at 1.3% in the Eurozone (from 0.8% in 2023), at 1.4% in the EU (from 0.8%) and at 0.8% for Italy (from 0.9%). According to the update provided today by the European statistics agency Italy remained stagnant in the third quarterafter a 0.4% drop in the second.
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Last week the European Central Bank said it believed A weak GDP in the Eurozone is “probable”. in the last quarter, after a further weakening of demand. While former ECB governor and former Italian prime minister Mario Draghi spoke of an “almost certain” recession. Not all signs are turning for the worse, however. The latest Eurostat data show a employment increasing by 0.3% in the third quarter, with growth of 1.4% year-on-year.
And surprisingly, as mentioned, one of the main indicators anticipating the performance of the economy in Germany, the Zew index, rose to 9.8 in November (from -1.1 in October), compared to the expected 5. Next week there will then be one of the highlights of the European Semester with the evaluation of the draft budget plans of the member stateswhich will be presented by the EU Commission on Tuesday 21 November, and will be crucial in view of the farewell at the end of the year of the safeguard clause which suspended the Stability Pact from the beginning of the pandemic until the end of 2023. On the reform of European economic governance, meanwhile, the European Commissioner for Economy Paolo Gentiloni he said he was “optimistic that member states will reach a compromise by the end of the year”.
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2023-11-15 09:56:00
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