Italy will be in a technical recession while inflation continues to bite into workers’ wages and bring down corporate earnings. Second ConfcommerceIndeed, at the end of this month the GDP of our country will have a slight decrease.
L’OECDhowever, provides a consumer price level which is significantly reduced this year, but still remains close to 7%with an expectation of Gross Domestic Product at the end of the year with only a slight gain (which can easily turn, at the first difficulty, into a full-blown recession).
In all this, the European banking system, despite the reassurances of EU central bank and financial institutions in the Member States, has proven not to be 100% solid. The collapse of Silicon Valley Bank has created tensions in the Old Continent, for now made more of fear than of real financial difficultiesyet the decline in the Credit Suisse share makes us think.
What emerges is one truth as obvious as it is worrying: the system, also considering the most unstable Italian credit institutions, already had some difficulties and can be endangered by international shocks.
Inflation still high in 2023
The OECD’s Intermediate Economic Outlook presented in Paris speaks of an inflation in Italy that should go from 8.7% in 2022 to 6.7% in 2023 and 2.5% in 2024. In the Eurozone, on the other hand, global inflation is expected to go from 8.4% in 2022 to 6.2% in 2023. 3% of 2024.
Italian GDP in 2023 and 2024, OECD forecasts
According to theOrganization for Economic Cooperation and DevelopmentItaly’s GDP should go from 3.8% in 2022 to 0.6% in 2023 and 1% in 2024. Meanwhile, however, our Gross domestic product is declining.
From the conjunctural analysis of Confcommercio in March it emerges that the first quarter of 2023 is configured as a period of slowdown in economic activity. Also in the month of March the GDP is expected to fall by 0.3% compared to the previous month, while on an annual basis there would be a 0.2% decline.
Overall, the first quarter of 2023 would close with a 0.3% cyclical contraction, confirming the “technical recession”. Estimates also point to a drop in food consumption (-3.9%)due to the price increase.
Banking chaos, excluding the risk of contagion in Europe?
When at banking chaoshowever, the OECD rules out any risk of “systemic crisis” after the failure of Silicon Valley Bank. According to chief economist Alvaro Pereira, “we are in a very different situation from 2008”. The representative of the Organization explained that “we have stronger regulation, central banks and regulators have learned from previous crises and most of the world’s banks are well capitalized”. As much as Crédit Suisse, he added, “the Swiss authorities reacted very quickly to limit the risks of contagion”.
The OECD recipe: reforms to avoid a new crisis
In such an unstable scenario, Pereira believes it is very important for the Meloni government continue along the path of the reforms started in recent years, strengthening the dynamism of businesses. The chief economist also spoke of reducing “some restrictions that exist in the service sector”but also of “essential reforms in macroeconomic matteron taxation”.
