In Italy, the recovery continues at a slower pace
The recovery is proceeding gradually in Italy, driven by domestic demand. However, the cyclical indicators suggest that, as in the euro area as a whole, GDP expanded more slowly in the second quarter than in the first. Uncertainty about the international context remains a significant deterrent to more decisive expansion of investment by Italian firms.
The effects of Brexit are limited so far …
The uncertainty unleashed by the outcome of the referendum in the UK poses a risk for the global economy. The macroeconomic effects for Italy are still hard to evaluate. The repercussions of movements in the financial, foreign exchange and commodity markets observed to date are negligible; the impact transmitted via trade with the UK should be limited. Considering the latest data, growth could come to slightly less than 1 per cent in Italy this year and about 1 per cent in the next.
… but the risks have to be countered
The risks to Europe’s and Italy’s economies could increase if financial market tensions spread, the banking system encounters difficulty, or business and household confidence are substantially undermined. They can be warded off by a resolute monetary, macroprudential and fiscal policy response and by the European authorities’ success in dispelling the fears for the cohesion of the Union.
