Italian GDP, IMF raises estimates again: in 2021 growth at 5.8%

Although globally the recovery has slightly ‘lost momentum’, the International Monetary Fund sees pink on Italy’s growth and again raises its estimate for 2021 with a GDP forecast at + 5.8%, with an adjustment of 0.9 points compared to the evaluation made in July and even +1.6 points on last April. This is one of the few upward revisions – and the largest among the major economies – contained in the newly released World Economic Outlook, which instead slightly lowers the estimate of global GDP, as well as that of large economies such as the United States and Germany. For Italy in 2022 the Fund confirms the growth estimate from 4.2% which should bring our GDP back above pre-crisis levels, after the -8.9% recorded in 2020. For Italy, however, the ‘IMF seems to see a period of continuous growth with GDP still positive in 2026 at + 1.0%. To support Italian growth, the Fund reports, the leap in private demand, estimated to increase by 4.2% this year and 5% in 2022, while public spending is expected to increase by 1.4 and 0.8% respectively. But the strongest contribution comes from Gross Fixed Capital Formation, an expenditure component of GDP that also measures investments: a 15% jump is expected for our country this year (in Germany + 3.5%, for example ) and 5.1% in 2022. DEFICIT – The public stimulus interventions for the post-Covid recovery will continue to dig a hole in the Italian public accounts (and not only) with a deficit that from 9.5% in 2020 year will rise to 10.2% and then drop to 4.7% in 2022, predicts the International Monetary Fund. The result, adding to the positive trend in GDP, is a public debt which after the jump of more than 21 points recorded in 2020 (when it rose to 155.8%) this year should drop slightly to 154.8% and in 2022 at 150.4%. Among the big economies, the new US public accounts deficit stands out at -10.8% this year, with a debt jumped to 133.3%, while Germany in 2021 should record a -6.8% deficit with a debt to 72.5%. INFLATION AND UNEMPLOYMENT – The ‘rush’ of the Italian economy – which this year should grow by 5.8% – will be accompanied by an increase in inflation and the unemployment rate, predicts the International Monetary Fund, estimating a rise in prices to 1.7% this year (after -0.1% in 2020) and a slight acceleration to 1.8% in 2022. This is a trend common to all major economies with an estimate for Eurozone at 2.2% this year and 1.8% in 2022, in line with the indications of the ECB which considers the elements underlying the flare-up in prices to be ‘temporary’. On the labor front, the Fund provides – once the protections applied during the pandemic crisis have been exhausted – for Italy an increase in unemployment from 9.3% in 2020 to 10.3% this year and a further increase to 11 , 6% in 2022. In the two-year period 2021-22, the IMF estimate for the Eurozone is a stable rate of 7.3%. GLOBAL GDP – After the devastating impact of the crisis opened by the pandemic “the global recovery continues but its momentum has weakened” also due to the spread of the Delta variant which “slows down a full return to normality”, the International Monetary Fund predicts, by adjusting the estimates for the global GDP which for this year is expected to grow by 5.9%, with a cut of 0.1 points on the forecast made last July. On the other hand, the estimate for 2022 is unchanged at + 4.9%. The Fund highlights how the combination of pandemic and problems in global supply chains has caused “problems in longer-than-expected supplies, further fueling inflation in many countries”. Overall, the Fund notes in the note signed by chief economist Gita Gopinath, ‘the risks to the economic outlook have increased and policy choices have become more complex.’ cuts for some countries “(but not for Italy): in particular the prospects for low-income developing countries have significantly worsened due to the dynamics of the pandemic. Together with Italy, France is the only major economy to record an improvement in the estimates for 2021 by the International Monetary Fund which forecasts for Paris this year a GDP of + 6.3% (+0.5 points on the July forecast) while in 2022 it is expected to +3.9 %. Estimation in decline for Germany, expected to grow by 3.1% in 2021, (-0.5 points on July) even if next year growth is expected at 4.6% (+0.5 points Overall, the eurozone is estimated to grow by 5.0 this year (+0.4 points on July, gra a jump in Italy and France) and in 2022 by 4.3% (unchanged). Strong growth (even if cut by 0.2 points) expected this year for the United Kingdom with a GDP at + 6.8% after -9.8% in 2020: for 2022 growth will proceed to + 5.0%. Among the other large economies, the clear downward revision (-1.0 points on July) for the estimates of US GDP in 2021 stands out, with growth now seen at 6.0% while in 2022 it will stand at 5.2% , in this case with an increase of 0.3 points. Anemic recovery for Japan with 2021 at + 2.4% (-0.4 points) and 2022 at + 3.2%, all with a public debt that this year should reach 257% of GDP. Finally, for China, the Fund applies a ‘slight lowering’ of the forecasts with growth to + 8.0% this year and + 5.6% in 2022 (in both cases with a downward revision of 0.1 points) .