The rebound of 2022 is about to take shape, but obstacles must be avoided. This was stated by the general manager of the Bank of Italy, Luigi Federico Signorini, who spoke at a Swiss Re event. The central banker did not hide the fact that the Italian economy “has lost vigor in recent months”, but also reminded the audience that forecasts see a sustained expansion starting from the spring, “mainly driven by domestic demand”. With the result that 2022 could close with a GDP of around +4 percent. All net of the epidemiological situation and the current crisis in raw materials, which is having repercussions on consumer prices.
The textures and liveliness of the Italian connective tissue recovered earlier than expected. And this is the good news, as pointed out by Signorini. “After contracting by around 9% in 2020, Italian GDP resumed growth last year, particularly sharply in the central quarters, thanks to the success of the vaccination campaign and the consequent easing of containment measures. Although the recovery of activity has lost momentum in the most recent months, the product is now close to the levels prior to the outbreak of the epidemic », explained the general manager of Via Nazionale. But if it is true that during the second quarter of the year it will reach pre-Covid levels, it is equally true that inflation could be a problem. “High-frequency indicators – explained Signorini – such as energy consumption and transport flows, are compatible with a slowdown both in manufacturing, which is mainly affected by the tensions on global value chains, and in services, which are particularly affected by the ‘attitude of caution that has returned to characterize the spending behavior of families in the face of the rise in infections and the rise in energy prices “. In addition, Signorini also recalled how “the latter have had a strong impact on consumer inflation which, after having fluctuated to values close to 1 per cent in the first half of last year, has started to rise rapidly since the summer, reaching December 4.2 per cent “.
For now, the data coming from the energy market have an impact. “In Europe, wholesale gas prices recorded unprecedented increases in speed and intensity, reaching a peak at the end of December equal to almost ten times the levels of the beginning of 2021”, noted Signorini without mincing words. “This increase was much higher than that of oil, which was also considerable, around 70%. Multiple factors of both supply and demand, common to other regions of the world, contributed to it, to which others specific to the European gas market were added ”, he added. These are factors that for now are still to be considered as transitory, but which have a more persistent character than imagined at the beginning of the autumn, as also stated by the European Central Bank (ECB).
Therefore, the chiaroscuro parts are not lacking. Specifically, as pointed out by Signorini, “the uncertainty surrounding this growth scenario is very high”. This is because, underlines the general manager of Palazzo Koch, “in the short term it is mainly connected to the epidemiological situation, the deterioration of which could determine more stringent restrictions on mobility and affect the confidence of consumers and businesses by hindering the recovery of economic activity”. Further risk factors, he explains, “are linked to a more accentuated transmission to the real economy of the supply-side tensions observed in recent months and to a more prolonged weakening of world trade”. In the medium term, things are no better. In the sense that the uncertain nature is still high: “The projections remain conditional on the full and timely implementation of the spending programs included in the budget maneuver and of the interventions envisaged by the NRP,” says Signorini. And the Recovery fund will be the next test bed of the first part of 2022. Its grounding in an effective and efficient way could be the counterbalance to the price fibrillations that the eurozone is experiencing.