OECD, Italian GDP continues to grow. Unemployment down, but “weak recovery relative to activities”
The OECD revises its estimate upwards Italian GDP for 2021 bringing it to + 6.3% compared to + 5.9% of the Economic survey on Italy in September (the government in Nadef expects + 6%). In 2022, on the other hand, growth should reach + 4.6% and + 2.6% in 2023. This is what the organization based in Paris underlines in Economic Outlook of December. “Growth in the third quarter – reads the report – maintained the sustained pace of the previous three months, with activity in the services sector recovering thanks to the easing of Covid-19 restrictions. In the period July-September, the growth of industrial production and retail sales continued, albeit at a more moderate pace. Confidence remains high, at levels higher than or equal to 2019 “.
The global trade disruptions continue, although local supply chains have mitigated some of the impact. The tourism rebounded in the third quarter, but levels remain well below 2019. The unemployment rate in Italy it will reach 9.6% in 2021 and then drop to 8.9% in 2022 and 8.4% in 2023. Furthermore, it is underlined how “the recovery in employment is weak” compared to the “recovery activities”. Fixed-term contracts have supported the increase in jobs. “Wage growth is still contained”, he points out the OECD.
The downward trend in public debt continues Italian although “the high levels remain a source of potential vulnerability, together with the risks associated with Covid“. Furthermore, the OECD highlights how in 2021 the debt / GDP ratio will reach 154.6% and then drop to 150.4% in 2022 and 148.6% in 2023. The organization highlights the need for “greater growth in the medium term to to lower “the level of debt. The deficit / GDP ratio is also down from 9.4% this year to 5.9% in 2022 and 4.3% in 2023.
“Implementing structural reforms to digitize and streamline civil and bankruptcy justice systems, increase competition, especially in services, and increase the efficiency of public administration remains crucial, along with tax reform to reduce the wedge and complexity of taxes on labor “. . On the banking front, the organization also expects “a sharp increase in non-performing loans that could reduce credit growth, delay already lengthy legal procedures and increase associated losses”.
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