The Italian economic landscape is currently marked by an alert issued by Confindustria, highlighting a stagnation in GDP in the third quarter and a series of challenges related to high-interest rates, inflation below 2%, and increasing economic uncertainty. The recent publication from the Confindustria Studies Center offers an in-depth look at the current situation of businesses in Italy, shedding light on the risks and opportunities the country faces.
Confindustria: inflation down but rates at the maximum
Despite Italian inflation falling below 2% in October, standing at 1.7%, interest rates remain anchored at their peak. This combination, emphasized in Confindustria’s Congiuntura Flash report, has created a blockage in the credit channel, putting strains on consumption and investments. Export, despite its efforts, contributes minimally to counteracting the situation, highlighting the challenges of the global economic environment.
Credit for businesses in crisis
The critical situation for Italian businesses is clear from the report, with an increase in the cost of credit to 5.35% in September and an annual drop in loans of -6.7%. Credit demand is constantly decreasing due to high-interest rates, and offer criteria are becoming increasingly stringent, leaving numerous businesses without access to the credit necessary for growth and development.
Confindustria: investments and industrial production slowing down
The rigidity of credit is negatively reflected in investments, with a significant slowdown in capital expenditure in the third quarter, according to Bankitalia’s analysis. Industrial production, although showing a positive variation of 0.2%, has experienced an overall decline of 1.8% since the beginning of the year, highlighting the need for stimulus measures to invigorate the manufacturing sector.
Confindustria: uncertainty related to ongoing wars
The current global scenario, characterized by ongoing wars, has led to an increase in economic uncertainty. However, despite this context, the cost of energy, so far, has not undergone significant increases, remaining significantly higher than the pre-energy crisis period. The stability of energy costs represents a positive aspect in an overall uncertain context.
Export hindered by negative prospects
Although Italian exports showed a slight improvement in the third quarter (+0.8%), prospects for the fourth quarter are negative. Expectations for the Eurozone are close to zero, with a marked decrease in the PMI and uncertainties about global trade. China reacted to the global slowdown by allocating $137 billion, but the cooling of global demand has impacts on Indian manufacturing and keeps Brazilian manufacturing in recession, contributing to the challenges faced by Italian exports.
Conclusions
Confindustria emphasizes the urgency of addressing the current economic situation decisively, with particular attention to reducing interest rates and supporting businesses to foster a sustainable recovery. The Italian economic landscape, despite some positive signals, requires timely actions to overcome obstacles and promote more robust growth. Collective commitment is essential to ensure the resilience of the Italian economic system in the face of global challenges and to create a more prosperous future for businesses and citizens.
