Other than “Slowdown”: for Confcommercio GDP and consumption at peak in the first quarter of 2022. For Draghi and the EU all is well
Confcommercio, with its Research Department, is also beginning to see the first signs of the famous "Slight slowdown in growth" due to the energy crisis and which Prime Minister Draghi speaks optimistically. I admit that the data from the trade association are even worse than what, spannometrically, we expected, but we will still make our considerations later. Find the report at this link.
What does the report say? Simple, that the first quarter of 2022 will see a drop in Italian GDP equal to -2.4% resulting from a -1.5% in January, -1.7% in February and -1.7% in March.
The reasons for this vertical decline in GDP can be understood: the very high increase in energy costs sends discretionary consumption to zero. We combine the fact that companies close because there is no possibility of coping with excessively high energy prices and we have a perfect mix.
Services are still well below 2020. Not only that, we also see the continuous collapse of goods such as semi-durable goods (cars), an indication of the consumer's lack of confidence in making any form of investment. Also interesting is the fact that in February 2022 there is a contraction in the consumption of goods, reversing a trend that was created during the Pandemic, in which lockdowns destroyed services (travel, catering, etc.) in favor of goods. Now this trend is also over and stagflation eats up goods too
According to Confcommercio, the current energy crisis, on an annual level, will reduce GDP growth from 3.9% to 2.5%. Probably the evaluations of the research body are Hic et Nunc.
Personally, I think this forecast is very optimistic: it is based on the forecast that the war in Ukraine will end in the first quarter, or a little more, and that therefore the conditions of the energy market will quickly normalize. I find this hypothesis optimistic. Indeed:
- It is not certain that there is not a worsening in east-west relations, with greater repercussions from the energy point of view, for example with sanctions on Russian oil or gas;
- at best it will take weeks to reach a peace agreement, but it is also possible that the situation will evolve into a war of attrition which, of course, we do not wish.
In these cases the "Slowdown", laws of GDP retreat could also affect the following quarters, until a new equilibrium is reached which, for now, we do not know what it may be. All predictions are perfect until they collide with reality.
But don't worry: you have an economist as prime minister.
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The article Other than “Slowdown”: for Confcommercio GDP and consumption at a peak in the first quarter of 2022. For Draghi and the EU everything is fine comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/altro-che-rallentamento-intanto-per-confcommercio-pil-e-consumi-a-picco-nel-primo-trimestre-2022-per-draghi-e-ue-tutto-bene/ on Tue, 22 Mar 2022 16:45:34 +0000.