War in Ukraine, here’s how the sectors most affected in Italy
Who was there and what was said at the meeting "The Ukrainian crisis – Reflections on the Italian economy" promoted by PwC Italia, in collaboration with the Gedi publishing group
"Hopes for a strong recovery are fading". Prime Minister Mario Draghi , speaking to the Chamber ahead of the European Council, certified what many economic operators already feared: the war in Ukraine has put a spanner in the works for the recovery of the European economy fed with PNRR funds. “Faced with this, a European response is needed: on the economic level, on the level of Defense, on the level of energy”, added the Premier.
The modification of the international economic framework
“The Ukraine crisis – Reflections on the Italian economy” was the theme of the first meeting “Italy 2022: People – Work – Business”, a series of dialogues promoted by PwC Italia, in collaboration with the GEDI publishing group. The event was attended, among others, by the Minister of Economic Development Giancarlo Giorgetti and Alessandro Grandinetti, Partner of PwC Italia, Clients and Markets Leader.
The modification of the international economic framework
According to Prometeia estimates, Italian GDP in 2022 would be 1.3 percentage points lower than the pre-war growth estimates . The growth expectation is + 2.5%, compared to a first scenario of + 3.8% with energy prices at the levels of the beginning of the year. “Recent geopolitical developments have substantially changed the international situation and the growth prospects of the Italian economy – said Andrea Toselli, President and CEO of PwC Italia , also present at the conference -. The growth of the Italian GDP for 2022 will be 1.3% lower than expected, due to the high energy costs, the increase in inflation and the consequent lower level of household consumption ".
The most exposed sectors
Geopolitical tensions, and the consequent slowdown in production, continue to increase the prices of raw materials such as aluminum (+ 63% vs 2021), copper (+ 12.9% vs 2021), nickel (+ 63% vs 2021) and palladium (+ 27% vs 2021). Furthermore, due to the sanctions against Russia, there could be a reduction (if not zero) in the import of these products.
The weight of sanctions on Italian exports
To this must be added the weight of the sanctions against Russia for Italian exports. "The imminent entry into force of Russian counter-sanctions on Italian products will obviously have an impact on those that weigh the most in exports to Russia, mainly machinery and appliances, food and drinks and textiles and clothing, amounting to 7.7 billion euro , 1.5% of the total exports of our country – added Toselli -. In this sense, on the whole, no particularly negative effects are expected for the Italian economic sectors. This is because the most important sector of our exports to Russia is that of machinery and mechanical equipment, which is equivalent to just 4.38% of the total exports of the sector, equal to € 49 billion ".
Energy products
Energy products (€ 6.9 billion or 49.1% of all imports from Russia) are currently excluded from the embargo regime. The 3-month price of gas and crude oil, which has already risen sharply since April 2020, recorded (between February and March 2022) a + 82.1% and a + 22.6% after the days that led to military escalation. The rise in the energy component justifies approximately 55% of the increase in the harmonized index of consumer prices HICP , which in Italy grew by + 6.2% (vs. February 2021), compared to + 5.8% in the euro area. The prices of the energy component showed a trend variation of + 45.9% in February (vs February 2021), driven by the prices of regulated energy (+ 94.4% vs February 2021) which reflect the increases in electricity and gas bills .
The costs of the ecological transition
Faced with these figures, the urgency to proceed with the energy transition is becoming more and more urgent. “ The ecological transition has a price – said the Minister of Economic Development Giancarlo Giorgetti -. It is a painful step to take. The alternative is the rationing of Russian gas , ten years of energy populism has weighed. It's time for bold choices like hydrogen and nuclear power. We must make great efforts towards what is renewable but not exclude what hydrogen or nuclear power can give us, France has strong positions precisely on energy ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/guerra-in-ucraina-ecco-come-i-settori-piu-colpiti-in-italia/ on Thu, 24 Mar 2022 14:24:54 +0000.