Stagnation: expected scenario in Italy
2022 could end in stagnation in Italy. We mean stagnation for the economy, that’s what will happen, but above all what it means.
The industry suffers with gas prices soaring , credit costs are also skyrocketing. The BTP saw the yield and the spread soar, reaching over 210 points. This is where the term stagnation comes into play , which indicates an economy that stops . Production and national income are immovable. So will Italy end 2022 in stagnation?
The price of gas is rising again and the high energy cost has been increasing costs for 12 months now, only partially mitigated by government interventions; high and persistent inflation will curb consumption; the rise in interest rates is becoming more pronounced and weighing down balance sheets. The indicators are bearish, also with regard to demand; once the rebound is over, tourism could push less in the winter, as construction already did in the summer.
document setting out the reasons
Growth does not find a way to restart. Only capital goods have held up, but all other sectors have not. The climate also remained uncertain in Europe. The main issues under consideration are energy prices and rate hikes .
A 50 basis point rate hike by the ECB, with an interest rate of 2.50%, has led to higher mortgage payments . A balance sheet reduction is expected from March 2023. This means that the central bank will reduce purchases of bonds , so far saviors of Italian debt. Nervousness in Italy: skyrocketing spreads and 10-year BTPs with yields over 4.0%. In short, Italy thus risks stagnation.