How is the Italian economy doing?

How is the Italian economy doing?

Here's what the Bank of Italy's € -Coin and ITA-Coin indicators show. Giuseppe Liturri's analysis

The worst forecasts on the trend of the Italian economy in the coming months are starting to come true. The € – Coin and ITA – Coin indicators published by the Bank of Italy for the month of September show an economic trend in largely negative territory. Going back in time, worse values ​​were recorded only in the months of the pandemic.

These indicators are constructed by Bank of Italy by exploiting on a monthly basis a vast set of macroeconomic historical series (such as, for example, industrial production indices, economic surveys, demand indicators and stock market indices) from which the relevant information is extracted for the estimate of the underlying dynamics of the area's GDP. In this way it is possible to provide an indication of the short-term change in GDP well in advance, net of the most erratic and therefore less predictable components.

In September, the eurozone indicator stood at -0.73 (from 0.23 in August) and that relating to Italy at -0.67 (-0.57 August).

The decline in business and household confidence and the slowdown in industrial production weigh heavily. As a result, the probability that at the end of October the cyclical change in GDP in the third quarter just ended is increasingly likely to show a negative, albeit modest, sign.

This leads to increasing recrimination towards the wait-and-see policy of the Draghi government since last autumn. When – faced with the obvious facts that signaled the flare-up of the energy price crisis and in the presence of a cost of financing the public debt still at very low rates of around 1.5% – he gave up putting hay in the farmhouse, issuing public bonds long-term, the proceeds of which could have constituted a reserve of liquidity to be spent in the lean times.

Unfortunately, the rhetoric of "virtuosity" and "credibility" has prevailed, and we have focused on undefined and mythological " Energy Recovery Funds ", obtaining poor results so far and remaining on the roadside with saucer in hand , while Germany passes in front of us at full speed doing it on its own.

Now we will spend more, financing ourselves – markets permitting – at rates three times the rate of last autumn.


This is a machine translation from Italian language of a post published on Start Magazine at the URL on Tue, 04 Oct 2022 05:25:45 +0000.