Italy therefore starts again. Thanks to vaccinations, the economic recovery looks “robust” in 2021 with GDP going up to + 4.3%, to then settle at + 4% in 2022. The International Monetary Fund certifies, at the end of the consultations for the ‘Article Iv, the restart of the beautiful country and invites the authorities to leave the aid put in place until the recovery has taken off.
There are signs of improvement in many sectors. L’SME services index, which monitors the performance of the sector, rose in May above analysts’ expectations to 53.1, signaling a return to above 50, the watershed between economic growth and contraction.
On the front ofindustry, the Confindustria Study Center notes a recovery in production in April and May and above all a growing optimism among companies. Indeed, the confidence index rose to its highest levels since autumn 2017 and low inventories and accelerating demand signal further recovery of activity also in the summer months.
Despite the succession of positive, economic and health indications with the slowdown in infections and hospitalizations, the president of Confindustria Carlo Bonomi calls for caution on the health front. “We must not let our guard down: the widespread feeling that is evident is that the worst is over, but I think instead that June and July will be two fundamental months in the fight against Covid”, he says, aware that economic recovery depends on the fight against the virus.
Along the same lines, the IMF which, while revising Italy’s growth estimates for 2021 and 2022 from the previous + 4.2% and + 3.6%, observes: “uncertainty remains” and the country’s economic outlook depends “on the progress of the pandemic, on the extent of the structural changes it will produce but also on the effectiveness of economic and health policies”.
The Fund therefore warns about the risk of cheap scars long-term “considerable”, citing among the risks the “speed at which the virus will be defeated” but also the maintenance of favorable financial conditions and the adequate implementation of the Recovery Plan, in addition to the political impetus for structural reforms.
“If these long-term risks materialize, the weaknesses of the high public debt could be exacerbated”, warns the IMF, forecasting a deficit of 11.8% for this year with a worsening public debt of 159.9%. compared to the June estimates when he assumed a debt of 157.1% and a deficit of 8.8%.
The IMF recommends Italy to continue using the budgetary policy to act as a buffer to the effects of the pandemic “through targeted temporary measures, together with a credible plan for a significant reduction in public debt in the medium term”.
Praising the measures put in place against Covid because they helped preserve the structure of the economy, Washington experts still call for attention: they could in fact have masked the extent of the financial weaknesses of companies and those of the job market.
On the latter front, the Fund notes as “the rotation on the labor market should resume once the health crisis has receded and the ban on layoffs is phased out. Extensive retraining programs along with labor market reforms and networks of Enhanced social protection will be essential to increase productivity and bring more women and young people into the workforce. “
Finally, attention must also be kept high on the financial system which, despite having shown itself to be “resilient”, has – observes the IMF – a non-performing loan ratio above the average of the euro area as well as a high exposure to Italy’s sovereign debt. .