Italy runs more than expected. This is confirmed by S&P Global, which has revised its growth estimates upwards, bringing that for 2021 to + 6.4% and that for 2022 to +4.7 percent. The US rating agency remains positive on the country, which is expanding at a faster rate than imagined. Factor that could lead to an improvement in the sovereign rating in the course of 2022. Provided there are no hitches on the road. First appointment, the race to the Quirinale. Second, the precise implementation of the Recovery Fund.
The prospects for Italy had not been so positive for decades. Despite the pandemic collapse of GDP, minus 9% in 2020, in the second quarter of this year Italian growth will return to pre-Covid levels. This is said by S&P Global in its conference at the beginning of the year on the prospects for Italy. And the opinion is unanimous. The situation is much better than the phase following the subprime mortgage crisis, which then led to the collapse of the fourth US bank, Lehman Brothers. Now the confidence of businesses and families is driving, despite the resurgence of infections from Sars-Cov-2, pushed up by the Omicron variant. For example, S&P points out, bottlenecks in supply chains are being felt much less intensely in Italy than in France or Germany. An element that could be functional to a more sustained expansion than elsewhere in the course of 2022.
On the macroeconomic front, the first priority is not to disperse current confidence, according to Sylvain Broyer, European chief economist at S&P. And at this juncture, according to Broyer, it will be necessary to see who will be the next president of the Republic, to understand the possible evolutions and therefore how to recalculate the country risk, hitherto kept under control by the actions of the European Central Bank (ECB). What is certain, for the S&P economist, is that there are no incentives for parliament to create a political crisis, but to have a continuity approach. Second, the chapter linked to the National Recovery and Resilience Plan (Pnrr). For Broyer, the key is the precise use, and with the correct timing, of the financial resources that are arriving from the European Union, or the 191.5 billion euros of the Next Generation EU program. Third priority, in addition to investing the NRR well, is the mix of public and private investments, which must go hand in hand, for Broyer. And consequently, the risks are all linked to this positive climate around Italy. The fear, according to the transalpine economist, is that of losing the current spark. “There is a lot at stake, it is an opportunity not to be missed,” he says.
On the banking side, again, the situation is better than expected. The rating agency sees a positive trend for the entire sector, and it is possible that it may raise the ratings, regardless of the sovereign one. With a positive outlook we find UniCredit, Intesa, Mediobanca, Finecobank, Fideuram, FCA Bank and the Institute for Sports Credit. The appointment, both for the sovereign and bank ratings, is next April 22nd.