How Italian growth will go in 2022
The GDP in Italy between history and economic situation. Gianfranco Polillo's analysis
Fortunately, we will close 2021 with a GDP of 1,674 billion euros, at the prices of 2015. A growth of 6.5 percent compared to the previous year. Slightly lower than France, but definitely better than Spain (5 per cent) and Germany (just 1.4 per cent). Compared to last year's losses (8.9 per cent), the recovery is partial. But if things go the way they should, by the middle of the year, we won't have queues anymore.
The change acquired since the beginning of the year is equal to 2.4 per cent. A whisker from that 4 percent that, crossing our fingers, we should reach. However, it will not be a smooth crossing. Clouds gathering on the horizon threaten storm. It will therefore take a lot of patience and a sense of responsibility. Above all, do not disturb the operator with political quarrels.
To understand how important this data is, it is good to remember what we have behind us. Since 2007, Italy has suffered a succession of crises, of external origin. Exogenous crisis, as economists say. The gravity of which – which is quite well known – is not reflected in all of its more recent history, starting from the end of the Second World War.
Historically and without wanting to go too far back in time, a first hint of a crisis – marked by the fall in GDP compared to the previous period – occurred in the early 1980s. Reflection of the changes that have taken place in American monetary policy, determined to fight inflation, after years – the previous decade – of permissiveness.
The decisions of Paul Volcker, who became President of the Fed , had a cascading effect. They forced the Bundesbank, which was the leader of the European central banks, to pull the oars in the boat. From Frankfurt the monetary tightening infected all the other central banks. With the immediate effect of reducing the growth rate of individual countries. The lowest point was reached in 1982, when the Italian growth rate was close to zero (plus 0.2 per cent) and that of Western Europe was 0.6.
It went even worse ten years later, in 1992. Once again – no matter what people say and think – the trigger was an external factor, the German unification, which multiplied the thousands of frailties that characterized the Italian reality. And which would later explode with Tangentopoli. The reunification of the two Germanys was managed with the interests of those territories as an exclusive point of reference. In order not to create citizens of the first and second category, the elites in command decided, in defiance of any economic and financial rule, that the two currencies – the mark of the FRG and that of the GDR – had to be exchanged at par: "one to one ".
An impossible mission. The internal demand of the new state skyrocketed, above all due to the higher consumption of the Eastern Lander, after the long years of “communist” deprivation. The effects on the German balance of payments were immediate, which in the past had always had a strong surplus. With the beginning of the unification, however, the passive became persistent, continuing until the birth of the euro. And it would have been even greater if the Bundesbank, with its monetary policy, had not supported the exchange rate by raising the interest rate. Essential to drain, from abroad, those resources that were necessary to allow the productive conversion of the new territories.
The effect of those policies was the definitive rupture of the delicate balances that governed the EMS: the European Monetary System. Above all Italy and Great Britain paid the price, which were forced to devalue their respective currencies – the lira and the pound sterling – but the consequences were felt in all the other European countries, which, in turn, in order not to devalue , were forced to raise interest rates, entering a competitive spiral. The ultimate result was a deflationary squeeze that led to a sharp fall in GDP both in Western Europe and in Italy. In fact, for the first time since the end of the war, the minus sign appeared: minus 0.2 per cent in Europe, minus 0.8 per cent in Italy.
To return to a new fall in GDP, we need to take a long leap and reach 2007: the year that marked the collapse of Lehman Brothers and the contagion in Europe of the American crisis. In Italy, due to the chronic weaknesses of its economy, the signs had appeared since 2008, when the GDP had shrunk by 1 percent, although in the Eurozone – which became so after the birth of the euro – there was still life. The GDP, in fact, had grown: a little, but had scored a plus 0.4 per cent. The last cry before the crisis.
The following year, in fact, the fall in the GDP of the Eurozone will be 4.5 per cent; in Italy of 5.3. The beginning of that sort of tragic destiny that will see the Bel Paese sink into the international rankings, almost always placing itself in the last positions. Only two years later, in 2011, in fact, the sad verification. Following the risk of contagion from Greece, here is the rise of that new monster that will go down in history with the name of "sovereign debt crisis".
No more American crisis that lands in the old continent, but DOC, as if it were a good wine from our lands. Also in this case Italy led the way: in 2012 the GDP fell by 3 percent, the following year by 1.8, in the one after that it was flat growth: absolute zero. The values of the Eurozone, on the other hand, were different: minus 0.9 in 2012 and minus 0.3 in 2013, but plus 1.4 in 2014.
It was then that the statisticians perceived the strangeness, but above all, the novelty of the phenomenon. It had never happened in the past that the lost ground was not recovered. And instead, starting from 2007, this will become the rule. At that time, the Italian GDP, in real terms (2015 prices), was equal to 1,795 billion euros. The highest value of all time. But immediately after, year after year, a disastrous fall. Which in 2014 had reached 8.5 percent acne, and then progressively reduced. In 2019, the delay was still 3.8 per cent. Then the crash of the pandemic, the last exogenous shock, coming from distant China, which further precipitated the situation.
In that year, in 2020, the fall, due to the spread of the virus and the consequent freezing of the main economic activities, will be equal to 8.9 percent, canceling the little progress that had been seen in previous years. And so, at the end of the year the distance compared to 2007 will be much greater, reaching a value of 12.4 per cent. It was as if two-thirds of Lombardy's gross income had suddenly been wiped out. We have since recovered about half of what we had lost. Well, but there is still a long way to go. It is good to know.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/come-andra-la-crescita-italiana-nel-2022/ on Tue, 01 Feb 2022 08:37:01 +0000.