EY Italian Macroeconomic Bulletin analyzes the European and Italian scenario on a quarterly basis and verifies that the scenario of uncertainty is what we are experiencing, with a global macroeconomic context subject to continuous geopolitical variables, which have further complicated the international situation and that of our country.
The Italian economic scenario
In the first quarter of 2023, GDP recorded +0.6% compared to the previous quarter (cyclical growth) and +1.9% compared to the first quarter of 2022 (trend growth). Growth then resumes, interrupted by the negative figure for the last quarter of 2022.
The figure for the first quarter was much higher than previously expected (the consensus of economic operators was +0.2%, in annualized terms almost one point of GDP less than the figure achieved) and significantly higher than that recorded in the previous quarter (-0.1% cyclical in the fourth quarter of 2022).
According to the EY Italian Macroeconomic Bulletin, growth was mainly driven by a recovery in household consumption with a 3.4% trend and 0.5% cyclical, after the respective 1.7% and -1.7% recorded in the fourth quarter of 2022 .
This is linked to a growth in fixed investments (0.8%), and a 1.4% reduction in exports and 1% in imports, a sign of a sharp slowdown in world trade.
Despite the latest acceleration, household consumption still remains below the levels recorded prior to the pandemic crisis.
EY Italian Macroeconomic Bulletin: future scenarios
After more pronounced growth in the first quarter of 2023, a slight contraction is expected in the second quarter.
The weakness of the economy in the quarter is partly linked to a reduction in exports, due to the slowdown in world trade, and a simultaneous acceleration in imports.
Added to this are the increase in interest rates, the general uncertainty, an inflation that continues to attack real incomes. Hence a weak growth in private consumption, but still a slight improvement compared to previous estimates, also thanks to a labor market that will continue to show positive signals. The unemployment rate is expected to decrease in 2023 and 2024, moving away from the values recorded in 2020 and 2021 and falling below the level of 8%.
According to the EY Italian Macroeconomic Bulletin https://www.ey.com/it_it the inflation estimates are also improving, which will decrease in 2023 and then drop significantly in 2024, but showing a certain persistence in the core component, and still not in line with monetary policy objectives until the latter part of 2024.