GDP Italy, OECD raises estimates for 2021 and 2022

Italian growth will mark an increase of 4.5% in 2021 with the acceleration of the introduction of the vaccine and + 4.4% in 2022. This is what emerges from the new OECD Outlook which revises the March estimate upwards (respectively to + 4.1% and + 4%). For the OECD, Italian GDP should reach 2019 levels in the second half of 2022. “Further support from fiscal policy will stimulate growth in the second half of 2021 and preserve production capacity, but will also increase public debt levels. L ‘Acceleration of global growth will support the rebound in production, exports and investment, the latter will also benefit from higher public investment. Consumption will pick up as restrictions on mobility are removed and employment growth picks up, “says the ‘OECD. “The government budget seeks to promote greener, digitized and inclusive growth, using EU funds from Generation EU together with generous incentives for hiring and investment. Growth-enhancing structural reforms are bound to accompany these efforts,” he adds, underlining that “the effective implementation of the national recovery plan and resilience requires the realization of the announced ambition of a goal-oriented, digitized and agile public sector”. On the productive fabric front, “the strong manufacturing production contrasts with the weakness of activity in the sectors of high contact intensity services”, notes the organization, adding that tourism, “which in 2019 represented 6.4% of GDP, continued to contract, particularly with regard to flights and overnight stays. Household spending was heavily influenced by confidence and business restrictions “. Italian debt flies: 160% in 2021 Italian debt soars to 160 % in 2021 under the weight of the measures to support the economy to contain the impact of Covid, but a reduction is entrusted to the return of growth supported by the NRP, the OECD still notes in the Outlook. The organization explains that the Italian government intends to maintain support policies for a certain period with the consequence of an increase in the deficit in 2020 and 2021 and a path of gradual return to below 3% in 2025. forecasts an increase in public investment public investment to 3.1% of GDP in 2022 and the debt-to-GDP ratio to almost 160% in 2021. To reduce medium-term public debt levels, the government will rely above all on greater growth, in part thanks to the rapid deployment of EU funds “of the Next generation Eu plan.” Effective implementation is essential to implement the government’s recovery plan “, underlines the OECD. And again: for the OECD in Italy with the stop to the moratoriums on bank loans, extended until December 31, 2021, would lead to an increase in business failures “The great stimulus of the government, the increase in vaccination rates and the relaxation of restrictions will drive economic recovery year. The manufacturing sector and exports will drive the recovery as global growth rebounds, supporting private sector investment. Increased public investments, including those based on the Next Generation EU, will further contribute to attracting private investment. The service sector will recover with the relaxation of restrictions and the vaccination of the population most at risk “, writes the OECD, noting instead that” bankruptcies will increase in 2022 when the debt moratoriums with the normalization of activity “. In the short term, the system “for the administration of bankruptcy cases and civil courts will need additional resources and to automate certain processes to manage the increase in” bankruptcy “cases that will follow the removal of support measures”. new hires only in 2022, especially for women and young people “A simpler and leaner regulatory environment that supports competition, particularly in the service sectors, would encourage employment and investment”, increasing the impact of the NRP, explains the ‘OECD underlining the importance of a more coordinated approach to taxes aimed at accelerating the green transition. be unemployment and would facilitate the transition to better-paid jobs especially for vulnerable people – women and young people in particular. “The possibility of new hires, especially for low-skilled individuals such as women and young people, will only return in 2022. In the meantime, the global recovery continues, reaching 6% (5.8%) this year, but the expected rebound after the pandemic remains uneven, notes the OECD chief economist Laurence Boone in the editorial of the new Outlook. ” some relief that we can see a brightening in the economic outlook, but with some unease we notice that this happens in a very erratic way. Among the new outbreaks of the virus, less frequent but more widespread around the world, global growth continues to recover – he says – we expect global production to increase by almost 6% this year, an impressive surge after the 3½ contraction. % in 2020 “. World GDP is estimated to grow by 4.4 in 2022.” While the recovery will bring most of the world to pre-pandemic GDP levels by the end of 2022, this is far from sufficient ” , stresses the chief economist OECD. “The global economy remains below its pre-pandemic growth path and in too many OECD countries, living standards by the end of 2022 will not have returned to the level expected before the pandemic”.