2023-09-03 16:17:31
After months of growth, the Italian economy is slowing down more than expected. GDP, inflation, unemployment rate… Back in figures on the deterioration of the economic climate in this new school year.
Italy’s economic outlook is deteriorating. These days, the publication of several indicators of the Italian economy show a decline in economic activity. What complicates the task of the government as it begins to work on the 2024 finance law.
Growth: sharper drop in GDP than expected
While Italian growth has been the fastest in Europe in recent months (+0.6% in the first quarter of 2023), gross domestic product has stopped increasing. In the second quarter, the GDP calculated by the National Institute of Statistics (Istat) fell by 0.4% compared to the previous quarter. This is a drop above estimates (-0.3%).
The economic growth that would be acquired for 2023 would be 0.7% – while the Italian government is counting on growth of 1% – and on condition that during the second part of the year the same GDP of the second quarter of 2022.
The fall in GDP is notably due to domestic demand, underlines Istat. There Household consumption fell by 0.3% and public administration expenditure fell by 1.6%.
In addition, over the April-June period, the industrial production fell by 1.2% on average compared to the previous quarter.
Unemployment rate up in August
Other bad news for Italy is that the unemployment rate rose to 7.6% in July compared to the previous month (+0.2%), according to provisional estimates published on 31st August by the National Institute of Statistics ( Istat).
Set at 7.4% in June, unemployment then posted its lowest level since 2009.
For the first time in seven months, the general employment rate of the working population in Italy fell by 0.2 points to 61.3%.
Also, the unemployment rate in Italy remains clearly higher than that of the euro zone, established at 6.4% of the active population in June, its lowest historical level.
Business confidence index at record low
Reflecting this murky outlook, Italy’s business confidence index in August hit its lowest level since November 2022 (when Giorgia Meloni’s government took office), Istat reported on August 30. After rising in July, the index rose from 108.9 to 106.8.
A pessimistic trend confirmed by the quarterly barometer published Friday by The European House – Ambrosetti, organizer of an annual economic forum in Cernobbio, considered a mini-Davos.
The index that measures the confidence of business leaders stood at 29 in the third quarter, a sharp drop of 12.5 points over one year, according to the barometer of the prestigious Italian think tank. And to specify that this index had reached 70.6 in September 2021 under the government of Mario Draghi, a historic record.
In particular, the announcement by the Meloni government of a tax on the “excess profits” of banks on the evening of August 7, which caused the fall of banking securities on the Milan Stock Exchange on August 8.
A glimmer of optimism, however, as to the perception companies have of the outlook for the next six months: the index is up to 33, once morest 26.6 a year earlier.
Regarding the index that measures household morale, it also fell according to the Istat report, but to a lesser extent, from 106.7 to 106.5.
Inflation: slowdown in consumer prices
This bad news can nevertheless be tempered by a glimmer of hope. The slowdown in inflation continues in Italy. Consumer price inflation slowed once more in August, dropping to 5.5% year on year, from 5.9% in July. Italian inflation is approaching the euro zone average, which remained stable at 5.3% in August.
Despite everything, the price growth of the average “shopping basket” remains strong, and stands at 9.6% in August in Italy.
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