MILANO – Even the OECD, the Parisian organization for cooperation and economic development, sees the strengthening of the Italian restart after the shock of Covid which cost, in 2020, a collapse of almost 9 points of gross domestic product. In the annual update of the growth forecasts, the OECD credits Italy with a growth of 5.9% in 2021 and 4.1% in 2022. Compared to the May economic outlook, the OECD has revised the Italian estimates up by 1.4 points for 2021 and down by -0.3 points for 2022.
The Italian growth prospect for the current year is above the average expected worldwide (+ 5.7%) and in the Eurozone (+ 5.3%), doubling the German one (+ 2.9%) but at shoulders of Spain and France. And, while waiting to see what the government will write in the Update to the Economic and Financial Document, it is moving towards that target of + 6% that the government now deems within reach.
Analyzing the situation globally, the OECD writes that the “extraordinary support” received from governments and central banks has given economies vital help to avoid the worst once the pandemic has broken out. Few changes compared to the March forecasts: the spread of vaccines and the gradual recovery of economic activities underway lead economists to conclude that global GDP will rise by 5.7% this year and 4.5% next. “The global economy is growing much stronger than estimated a year ago – reads the text – but the recovery remains uneven, exposing both advanced and emerging markets to a series of risks”.
On the eve of the meeting of the Federal Reserve which should officially open the discussion on the start of tapering – the gradual tightening of the purchase program of 120 billion dollars a month – the OECD report urges not to prematurely withdraw stimuli, both fiscal and monetary. “Support from macroeconomic policy remains necessary while the near-term outlook is still uncertain and labor markets have not yet recovered, with the policy mix conditioned by economic developments in each country.” Looking precisely at the action of central banks, in light of the flexibility introduced in both Washington and Frankfurt on the possibility of temporarily exceeding inflation targets (2%) without having to raise rates to cool the economy, the OECD acknowledges that monetary policy “must remain accommodative but clear indications are needed on what the time horizon and the extent to which any overshooting of the inflation target will be tolerated, with an indication of the sequence of any moves to be taken towards a normalization process “.
The Paris organization warns that “fiscal policies should remain flexible and dependent on the state of the economy. A premature and sudden withdrawal of political support should be avoided while the near-term outlook is still uncertain.” Furthermore, the OECD calls on governments to draft “credible fiscal frameworks that provide clear indications on the medium-term path to debt sustainability and likely policy changes along that path, would help maintain confidence and enhance the transparency of fiscal choices. “. More generally, according to the OECD, “stronger public investment and strengthened structural reforms are needed to increase resilience and improve the prospects for sustainable and equitable growth.
The work restarts. Alarm for the jungle of a thousand contracts
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Inevitable, then, the reference to the key to restart: the battle against the virus that is played with the weapon of the vaccine. Governments, the Outlook urges, “must ensure that all necessary resources are used to distribute vaccinations as quickly as possible around the world to save lives, preserve incomes and keep the virus under control”. Therefore, “greater international efforts are needed to provide low-income countries with the resources they need to vaccinate their populations for their own global benefits.”
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