Because the GDP data is comforting for Italy
Facts and insights on the GDP figure for the third quarter in Italy. Giuseppe Liturri's analysis
Good news arrives for the Italian economy, albeit looking in the rearview mirror. In fact, the change in GDP in the third quarter – preliminary calculated by Istat and announced this morning – is equal to + 0.5% compared to the previous quarter and + 2.6% compared to the same quarter of 2021.
Agriculture and industry are retreating and a negative contribution from the foreign component (with imports exceeding exports), but significant growth in services. Probably driven by all sectors related to tourism.
The figure is higher than the forecasts attested around the zero or slightly positive change and the latest projections of the Parliamentary Budget Office and Bank of Italy, which had forecast a negative change, albeit modest.
THE QUARTERLY TREND OF GDP
With this quarter, the driving force of growth probably ends compared to periods – such as summer 2021 – still conditioned by the restrictions linked to the pandemic. Consumers are still in full reaction to two years of restrictions and have spared no expense, especially tourism, during the summer of 2022, keeping the economy on its feet.
With this change, the growth acquired for 2022 – the one that would be achieved if the following quarter were at zero growth – is equal to + 3.9%.
Numbers that seem wind in the sails for the government of Giorgia Meloni.
WHAT CHANGES FOR THE GOVERNMENT AFTER THE GDP DATA
In fact, this GDP growth will make it possible to immediately launch, with effect on November and December, measures in favor of households and businesses to mitigate the impact of the energy crisis. Without worsening the 5.6% deficit / GDP ratio promised in Brussels. On the contrary, considering that nominal GDP should have recorded an even greater variation – it should not be forgotten that the deficit / GDP is calculated using nominal GDP inflated by inflation – the space available to the Meloni government is still increasing.
However, the recession prospects for 2023 remain unchanged but, even in this case, there is room for our public finances.
In fact, starting from a higher 2022 deficit / GDP, the decrease requested by the Commission (at least 0.6%) will allow a landing on a slightly higher deficit / GDP level (4.5% -5%) .
In short, the government should have more space, albeit limited, to cushion the impact of the recession, which still seems inevitable.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-il-dato-sul-pil-e-confortante-per-litalia/ on Mon, 31 Oct 2022 10:13:40 +0000.