The new year opens with good news. For the first time in a long time, estimates for Italian GDP growth have been revised upwards. But will this positive growth trend continue throughout 2022? Let's see what the experts and the main European and world economic institutions are saying.
Italian GDP: + 4.7% in 2022
The Italian government is quite optimistic for the year to come. According to the "Nota di Aggiornamento al Def" (NaDef) at the end of September, the GDP will grow by 4.7% in 2022, less than the 6% of 2021, but still much more than the average to which we have become accustomed in the last 20 years. Economic expansion will be driven by investments, especially those stimulated by the European funds envisaged in the NRP. ISTAT, on which the government's forecasts are based, at the beginning of December confirmed the figure of +4.7% growth for 2022. This is despite the fact that the estimate for 2021 was further improved, reaching +6.3%. The world average for 2022 is expected to be around +4.5%, so Italy is expected to perform particularly well for the second year in a row.
An important confirmation of the Italian Government's estimates comes from the Standard & Poor's rating agency, which guides the decisions of thousands of investors and funds around the world for which our country will grow by 4.7%.
OECD forecasts: Europe better than the US
The OECD basically confirms the vision of the Italian Government: for the Organisation for Economic Co-operation and Development, our country will see an expansion of the economy of 4.6%, against only 3.7% in the USA, 4.1% in Germany and 4.2% growth in France. Spain and the UK, on the other hand, will do better than us, with GDP growth of 5.5% and 4.7% respectively. The growth of these two countries is expected to offset the higher losses incurred in 2020 due to Covid. An interesting reconfirmation is that India (which replaced China in this role last year) will lead the global economy with an incredible +8.1%.
International Monetary Fund, European Commission and Bank of Italy: pessimism or realism?
The International Monetary Fund is outlining a still good but less exciting situation, considering that our economy will grow by more than 4.2%, less than the German economy (4.6%), the American economy (5.2%) and in general the average of the most advanced countries.
The European Commission predicts that Italian GDP will grow by 4.3% in 2022, on average with the rest of the EU. This is in any case a good result, considering that for many years we have been last or penultimate, sometimes surpassed at the bottom of the ranking only by Greece.
The most negative of all seems to be the Bank of Italy, which does not go beyond +4%. These are very recent estimates (December 2021), revised downwards compared to July, when growth for 2022 was forecast at +4.4%.
Uncertainty on the role of inflation remains
The Bank of Italy expects domestic household demand to increase by around 4.6% compared to 5.2% forecast by the Executive. The increase in investments could also be more limited, at +5.5% compared to +6.8% according to the Government. The outlook remains positive, but the worsening of estimates, Bankitalia specifies, is mainly the effect of the better economic performance recorded in the second half of 2021.
The role of inflation, however, could affect these forecasts, particularly with regard to the increase in the costs of raw materials and energy recorded in recent months. Inflation of 3.7% in Italy has not been seen for several years and this could lead to a reduction in consumption, especially in lower income brackets.
After the peak at the end of 2021, when Eurozone inflation reached 4.8%, the European Central Bank expects a rapid decline in 2022 and a stabilisation around 1.8%. Unfortunately, since these price increases are due to factors external to European policies, it is difficult to know in advance whether these forecasts will come true.
We hope that coming from a 2021 in which the recovery (economic, social and also health) was clear, this positive trend will continue throughout next year, in the expectation of being able to return as soon as possible to a GDP level equal to or higher than the pre-pandemic one.