Today’s Istat data highlighted a substantial leap in the consumer confidence climate index in November (from 90.1 to 98.1). The composite index of business confidence also rose sharply (from 104.7 to 106.4). The recovery in consumer confidence was driven by the national economic climate and by expectations for the future (which have risen to their highest level since the outbreak of war in Ukraine), which recover much more than assessments of current conditions.
The November surveys, in Italy as in other Eurozone countries, showed less pessimistic expectations on the economy and on inflation, both on the household side and on the business side. “This is mainly due to the drop in gas prices recorded in recent weeks compared to the peaks reached last August, and to the lower risks of “forced” rationing of energy consumption in the coming months”, asserts Paolo Mameli, senior economist in the Studies and Research Department of Intesa Sanpaolo.
Mameli expects a decline in GDP between the end of 2022 and the beginning of 2023 which could however be milder than previously forecast thanks to the recent evolution of the energy crisis. Confidence surveys suggest lower risks on economic activity in the short term (with a horizon of 3-6 months). “However – warns Mameli – the risks could be postponed until next year, when the energy crisis could show a recrudescence in relation to the need to replenish gas stocks in the central months of the year. In any case, we now see less downside risk to our (already above consensus) forecast of Italian GDP growth of 0.6% in 2023.