Elections 2022, S&P: “Difficult choices for new government”

“A difficult moment for the Italian and European economy” is what the new Italian government that will be born after the elections that led the center-right to success will face. This is the assessment made by S&P in the bulletin released after yesterday’s vote. “The new Italian government faces difficult choices between the European recession and high debt”, S&P points out, explaining that “in the wake of rising energy prices and weakening global demand, S&P Global Ratings expects a slight recession in Italy next year with a forecast of GDP contracting by 0.1% before a recovery of 1.5% in 2024 “. The S&P rating agency does not foresee “immediate tax risks from the transition to the new government”. “Our basic forecast is that the new government – reads the bulletin issued following the vote – will finalize the budget law 2023 by the end of October and submit it to parliament in November, without prejudice to the budget objectives indicated. in the current government stability program, published in April 2022 “. PNRR – According to the S&P rating agency for Italy “the key to economic recovery (and indirectly for public finances) in 2023-2024 will be whether the new government will implement the reforms of its National Plan for Recovery and Resilience to allow the disbursement of the remaining 145 billion euros “. “During the campaign, – reads the bulletin issued following the vote – Giorgia Meloni, leader of Fratelli di Italia, expressed interest in the revisions of Italian commitments”, but, S&P underlines, “in our opinion, a possible reopening it could cause a delay in scheduled disbursements and increase uncertainty about the economic prospects at a time when the financing conditions of Italian families and the state continue to shrink “. Furthermore, a possible renegotiation “could also be harmful to the finances of Italian local and regional authorities”. Italy’s GDP – Italy’s gross domestic product will grow by 3.4% this year, while in 2023 it is expected to fall into negative territory (-0.1%). This is what emerges from a table contained in the S & p dossier on economic forecasts in Europe. Looking at Germany, GDP should record a 1.5% increase in 2022, which would drop below zero the following year (-0.3). France should save itself from the negative sign in 2023, but only slightly: + 2.4% this year and + 0.2% next. Spain achieves the best performance in terms of GDP in 2022, with a + 4.5% and is also defending well in 2023, with a + 1.1%. to 7.8% and drop to 4.3% in 2023. In Germany it would remain at high levels both years (+ 8.4% and + 7%), while in France it would go from 6.1% this year to 3.3% next year. In Spain the record level of 11.1% is reached, which should halve the following year (5.6%). EUROPE – Eurozone gross domestic product will grow more than expected this year, reaching + 3.1%, while for 2023 ” the eurozone economy is expected to stagnate ”. “A sharp slowdown in eurozone growth is imminent,” the report reads. According to the rating agency, after 5 consecutive quarters closed in positive territory, a period, two or three quarters, of reduced activity should arrive. That’s why S&P expects the eurozone economy ” to stagnate next year (0.3% versus 1.9% the previous year). For this year we are revising our growth forecast up to 3.1% from 2.6% and lowering our unemployment forecast. ”