The rise in Italian Gdp is most robust than expected (Csc Confindustria)

The rise in Italian GDP is more robust than expected: the Centro Studi Confindustria forecasts +6.1% in 2021, 2 points higher than the April estimates, followed by a further +4.1% in 2022. Thanks to the effectiveness and capillarity of vaccinations in Italy, the more contained impact of the Delta variant of Covid explains the considerable upward revision. However, there are a few issues that represent risk factors within this scenario. The study center indicates 5 of them.

First of all, the adoption of new restrictions on travel is the leading risk since it would negatively affect, very quickly, the confidence of operators, consumption, and therefore investment and employment. Moreover, even if Csc excludes the possibility of the emergence of new variants potentially more contagious or for which the currently available vaccines are not fully effective, there remains a level of uncertainty that is difficult to quantify. Another critical issue is the significant shortage of raw materials and semi-finished products. Phenomena may be temporary, but the risk may be only partially so and therefore become more structural, slowing down economic activity in a more significant and prolonged manner. The third aspect is inflation, which could take on a more structural character in Europe and Italy, leading the ECB to anticipate monetary tightening. A sudden rise in rates in the Eurozone would have undesirable effects on the cost of public debt, and therefore very negative impacts, especially for a country like Italy with a high level of debt. Fourthly, the fact that the total effectiveness of the PNRR is subject to the identification of an efficient allocation of resources, the respect of the timeframes envisaged, and how The Government will implement investments and the numerous reforms planned. Finally, the profound difficulties of various companies operating in the Chinese real estate market, especially Evergrande, is increasing fears that the sector will suffer serious setbacks. The risk is a crisis at a national level, which could have very adverse indirect effects on China's trading partners and, more generally, on the world economy.