The Italian economy shrank by a post-war record of 8.9% last year, and Confindustria said even such “historically high” growth estimates would not make up for last year’s losses.
“At the end of 2022 the economy will have barely bridged the gap opened in 2020 by the pandemic,” Confindustria said as it announced its latest economic forecasts.
The national business association cautioned, however, that its estimates were based on expectations for progress on vaccinations in both Italy and the rest of Europe, and hinged on the coronavirus being “contained in an efficient way”.
“Given the great uncertainty (of this), the risks related to the GDP (gross domestic product) estimates are high, both on the upside and the downside,” the report added.
The group said it had cut its initial growth estimates for Italy, published in October, by 0.7 percentage points for this year due to weaker-than-expected growth in the final quarter of 2020 and the first three months of 2021.
It said it saw Italy’s deficit at 7.8% of GDP this year and at 4.8% in 2022. Hikes in government spending to support the economy drove the country’s deficit to 9.5% of GDP at the end of last year.
Italy has registered more than 113,000 COVID-19 deaths since the outbreak first emerged in February last year, the seventh-highest in the world.
Mario Draghi’s government expects GDP to expand by 4.1% this year and 4.3% in 2022, three sources close to the matter told Reuters in March.
Rome’s official estimate, made by the previous government in January, envisages a deficit-to-GDP ratio of 8.8% this year, based on an economic growth forecast of 6%.
The new deficit and debt targets, along with multi-year GDP growth forecasts, will be issued in the Treasury’s Economic and Financial Document, expected to be approved next week.
The European Commission, the International Monetary Fund and the Bank of Italy all currently see Italian growth below 4% this year and next.
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