Economic Bulletin No. 3 - 2021

The global economy is recovering

With the progress of the vaccination campaigns, global GDP growth has strengthened; the outlook, while improving generally, is still uneven across countries. In the euro area, rising energy prices have led to an increase in inflation, although this should be temporary. The ECB Governing Council will maintain extremely expansionary monetary conditions, which are still essential to support the economy. Under the new monetary policy strategy, forceful and persistent expansionary action is required when official interest rates are close to their lower bound.

Growth strengthens in Italy

Growth gained pace in Italy in the second quarter, thanks to the stepping up of the vaccination campaign and the gradual easing of restrictions; based on the available indicators, it is estimated to have expanded by more than 1 per cent compared with the previous quarter. A renewed increase in industrial activity was accompanied by the beginning of a recovery in services.

Inflation rises but the core component remains very low

The increase in commodity prices brought inflation to 1.3 per cent in June; excluding energy and food prices, it nonetheless continues to be very weak. There is no evidence of further transmission of energy costs to consumer prices or of a significant pick-up in wage growth.  

GDP looks set to accelerate from the summer onwards …

This Economic Bulletin contains updated projections for the Italian economy. Assuming that the public health situation will keep improving at both national and global level, with continued strong support from fiscal policy - using both national and EU funds - and that financial conditions remain favourable, GDP is projected to accelerate significantly starting from the third quarter, with average growth for this year currently estimated at 5.1 per cent. Contrary to what was observed after the two previous recessions, a strong contribution to growth could come from investment.

… but the course of the pandemic and the effectiveness of the policies are factors of uncertainty

The main elements of uncertainty surrounding the outlook for growth are linked to the course of the pandemic (which can affect consumption and investment), to how effectively and swiftly NRRP-related projects are implemented and to their ability to also impact potential growth, as well as to how consumers respond to the re-opening of the economy.