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Istat, Italy’s GDP growing until 2022

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GDP growth will slow down next year, but will remain strong: from 6.3% expected by the end of 2021, it will drop to 4.7%, a record number for the stagnant Italian economy. This was announced by Istat in its Report on the prospects for the Italian economy in 2021-2022 from which it emerges that investments will support the recovery with a more pronounced intensity this year (+ 15.7%) than in 2022 (+ 7.5%).

Consumption by resident families and ISPs will also show a marked increase (+ 5.1% and + 4.8%). And as a result, employment in 2021-2022 (measured in terms of annual work units) will follow the improvement in economic activity with an increase of 6.1% this year and 4.1% in 2022.

The trend in the unemployment rate will instead reflect the gradual normalization of the labor market, with an increase in 2021 (9.6%) and a reduction in 2022 (9.3%).

In terms of the numbers, the increase in GDP will mainly be determined by the contribution of domestic demand net of inventories (respectively +6 and +4.4 percentage points in the two years) which would be associated with a more contained contribution of net foreign demand ( +0.3 percentage points in both years).

The deflator of resident household spending will increase by 1.8% this year, reflecting the current acceleration in inflation which is expected to continue into 2022 (+ 2.2%).

The scenario presented, explains Istat, takes into account the effects of the interventions envisaged by the National Recovery and Resilience Plan (Pnrr), the still expansive orientation of monetary policy and the absence of significant containment measures for related social and productive activities to the health emergency.

The current increase in prices is characterized by the inflationary effects connected both to the recovery in demand and to the phase of exceptional growth in oil prices and the prices of agricultural raw materials, more accentuated in the second half of the year. Inflationary pressures are expected to continue in the coming months, until an expected easing in the second half of 2022. On average in 2021, the household final consumption expenditure deflator is forecast at + 1.8% while the GDP deflator is expected to be + 1.2%; in 2022 they are estimated at + 2.2% and + 1.9% respectively.

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