Global growth picks up but uncertainty remains high
The prospects of a global recovery are gaining ground, thanks in part to expansionary policies in the main economic areas. The conditions on the financial markets are relaxed on the whole. However, the uncertainty surrounding the future stance of economic policies remains high; this could have adverse repercussions on investors’ assessments and on the volatility of stock markets, posing risks to the broader economic outlook.
In Italy the recovery continues at a moderate pace
In the first three months of the year the Italian economy continued to expand, gaining around 0.2 per cent compared with the previous quarter, though with downside risks. The expansion of activity in services more than offset the weakening trend in manufacturing. Firms’ assessments of the general state of the economy improved. Intentions regarding investment plans and prospects for foreign orders are favourable. The latest data signal a continued upturn in employment. Private-sector lending continues to rise, especially loans to households. Credit quality improves, reflecting the strengthening cyclical outlook.
Inflation rises but core inflation remains weak
In the first three months of this year, inflation rose in both the euro area and Italy. The increase is attributable to the most volatile components (energy and food prices); it has not yet led to upward revisions of inflation expectations beyond the current year, as prospects for wage growth are still weak in many countries. The Governing Council of the ECB confirmed that a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium term.
