Positive surprise from the GDP of Italy which in the second quarter accelerated more than expected, giving an encouraging signal regarding the economic recovery underway after a slight recovery in the beginning of 2021. According to the preliminary reading released today by Istat, the Gross Domestic Product (GDP) in the period April-June increased by 2.7% compared to the previous quarter, largely exceeding expectations, and by 17.3% in trend terms (i.e. compared to the second quarter of 2020, characterized by the first lockdown).
Definitely better than France and Germany
Growth that goes beyond the European average (+ 2% qoq of euro area GDP). In the quarter, the performance of the Italian economy was approximately in line with that of Spain (2.8% qoq) and much better than Germany (1.5% qoq) and France (0.9% qoq). t).
The result, Istat specified, benefited above all from a strong recovery of the service sector, with the reopening of activities, and the recovery of the propensity to consume. “The reopenings have worked their magic, enhancing services far beyond expectations – he commented Paolo Pizzoli, Senior Economist of Ing – (…) On the domestic demand front, we suspect that both private consumption and gross fixed investment should have outperformed due to the combined effect of the lifting of the restrictions and, on the investment front, in anticipation of the boost to activity to come. with the implementation of the recovery plan “.
The June labor market data, also released today, also turned out to be stronger than expected, combining healthy employment expansion and a decline in unemployment and the number of inactive people, pushing the unemployment rate at 9.7% from 10.2% in May. To be sure, lifting the layoff ban for most industrial sectors starting in July could lead to some disappointment, but the survival of the low-work regimes will limit the possibility of major setbacks for another couple of days. quarters, according to IG.
The short-term growth prospects remain positive
Looking ahead, the push seems to continue also in the summer quarter, as suggested by the strengthening of the July index consumer and business confidence. A positive climate and a general improvement in prospects, therefore, on which however there are doubts and uncertainties linked to the trend in the health situation. “The developments on the pandemic front remain a persistent risk due to the spread of the Delta variant – adds the economist of IG – However, with about 62% of the population having received at least one dose and 50% fully vaccinated, and with employment rates in hospitals that remain at very low levels, the reintroduction of severe restrictions on a large scale seems less likely, at least in the short term ”.
In short, the gear change in the second quarter and the confidence data for July suggest that, barring further negative surprises from Covid, conditions should remain favorable for solid growth in the third quarter, so much so that Ing is ready to revise growth projections upwards. average above 5% in 2021 from the previous + 4.6%.
Unknown variant delta especially on autumn months
For the next few quarters, the parable of the rise of the infections dictated by the spread of the delta variant. “If followed by an increase in hospitalizations, it could at least induce economic agents to a new increase in caution in spending decisions, if not forcing the authorities to new restrictive measures, albeit probably milder than those put in place during the previous waves ”, he argues Paolo Mameli, senior economist Studies and Research Departments of Intesa Sanpaolo, which foresees an impact more in the autumn quarter than in the summer one, even if the next few weeks will be decisive to understand if the progress of the vaccination campaign will be able to contain the pressures on the health system, thus avoiding restrictions with significant effects on the activity economic.
However, Mameli estimates a GDP trend that is still largely positive in the coming quarters, but destined to slow down gradually (on a quarterly basis) after the jump recorded in the spring months. “New concerns about the epidemiological situation are unlikely to prevent a rebound in GDP of more than 5% this year,” concludes Mameli.