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- Published: April 23, 2015
The balance of economic indicators undoubtedly hangs from the side of the slope of GDP. The question mark remains on the speed, which orders, expectations and leading indicators indicate acceleration in the spring. As written by CSC three months ago, the new forecasts issued by various institutions are revised upwards; values
remain suitably cautious because it ignores the fact that Italy suffered from slow growth before the crisis. The crisis itself has operated brakes extra-ordinary: high unemployment, credit crunch, large spare capacity, fragile property sector, profit margins to a minimum and saving to replenish hinder the re-start domestic demand and production activities. For each of them, however, arrive reassuring signals loosening of the grip. In this scenario, with the Government DEF properly mitigates the restrictive fiscal policy; in terms of public investment should make full use of European funds and margins of flexibility for their co-financing. Imperative, is to have room to maneuver in the public accounts is to raise the potentiates the-country, is not to waver on reforms. What are the gasoline to power the trust of partners and financial markets, again on alert for risky deadlock in negotiations on Greece. The global environment remains favorable climate in the US, port strikes, impact of the arrest of the boom in the oil sector and strong dollar have slowed growth, which is expected to take effect; China is landing piloted, but accounts-tinue to be a powerful engine of world development; the Eurozone, with the greatest burden on Italian exports, has gradually improved; the conditions of Brazil and Russia are difficult but not worsen. Interest rates will remain low for a long time, down than the market, thanks to the ECB.
In depths. The Italian industrial production is estimated by the CSC in increase of 0.1% cyclical in March, after + 0.6% in February. This leads to + 0.2% variation in the 1st quarter and + 0.3% drag on the 2nd. The manufacturing PMI rose in March to 53.3 (from 51.9 in February) with total orders in strong acceleration (54.5 to 51.2). It also came back to report the PMI service sector expansion, after the stagnation recorded in February (51.6 from 50.0), thanks to the new business (53.1). Based on these data, the GDP is expected to grow by 0.2% in Q1 and economic accel-rare in spring. In addition, the OECD leading, up to three months (+ 0.14% in February), sees a further and stronger GDP growth in the summer months.
The improved economic environment has led the main forecasters to revise upwards their estimates of GDP growth Italy-no in 2015 and in 2016 (for the CSC respectively + 0.5% and + 1.1%). Since December, the average forecast has risen by 0.3 points per year (a + 0.7%) and 0.4 for 2016 (to +1.4%).
Italian exports rose by 2.0% in February, after -2.1% in January (data at constant prices). It is also distributed to the major European economies: Germany (+ 1.1% from -2.6%) and France (+ 1.0%, -0.2%). In the 1st two months of the Italian exports rose by 0.4% on Q4 2014 (+ 1.5% extra euro area, -1.3% intra). Prospects also improved as a result of weak euro and European demand stronger. More favorable assessments on foreign orders in manufacturing in March: a maximum of nine months the PMI component (56.7) and for 11 months judgments ISTAT (balance -13). I’m at the top from 2011 expectations of industrial enterprises on foreign demand for the 2nd quarter (Bank of Italy-Il Sole 24 Ore).
Imports were down in February (-1.0%, following the 2.5% in January), entirely due to lower purchases energy (+ 0.6% excluding energy). In the 1st two months have marked a robust 2.4% on Q4 2014, index that is undergoing a recovery in domestic demand.
In first two months of the year the number of persons employed in Italy remained essentially stable at the level of the last quarter of 2014, when he was already stagnated. It is a temporary arre-am after the progressive rise between September 2013 and September 2014 (+ 232mila units). In the coming months the permanent hiring will be supported by tax relief and new rules on contract protections growing.
The occupation as a whole will advance in live with the situation, according to the strong improvement in business expectations: for spring 2015, the balance of responses is jumped into positive territory for the first time since the crisis began, to +4.9 for the conditions in which companies operate and +3.8 Employment (Bank of Italy-Il Sole 24 Ore).
The unemployment rate fell to 12.7% in the first two months of 2015 (from 13.0% in the 4th quarter), compared with a workforce in temporary decline, after + 0.9% in 2014. The greater confidence in finding a place, consistent with the sharp decline of the concerns about the development of unemployment, will support the expansion of the workforce, but slows the return unemployment itself.
Positive signs for the Italian domestic demand. The conditions for investing according to entrepreneurs are much improved: the balance of opinions rose to 14.5 in March from 15.0 in December; for 2015 as a whole the percentage difference between those who expect an increase and a decrease in those investment plans rose to 16.4 from 3.6 (the Bank of Italy-Il Sole 24 Ore). Improve further orders from inside (-30.7 in the first quarter, from -34.0 in 4th 2014) and expectations of the producers of capital goods (ISTAT), a sign that you dust off plans to purchase machinery and equipment.
Favourable also the trend in consumption. The indicator ICC by volume rose 0.1% in the first two months of 2015 and car registrations of 7.4% in Q1, compared to 4th 2014. The balance of opinions on orders of domestic producers consumer goods rose to -20.0 (from -23.3 last quarter of 2014). The strong increase in consumer confidence promises more spending: in March, the index rose by 3.2 points (+8.4 in the quarter); well the climate personal, more correlated with the consumption decisions of households, which rose for the 3rd month in a row (+1.7 in March, +4.3 in the quarter).
The Government Document of Economics and Finance (DEF) has revised GDP growth: 0.7% this year (0.6%) and 1.3% the next (from 1.0%). With positive effects on public revenues: +6.4 billion in 2016 compared to previous sti-me. In addition, the lower yields on government bonds allow you to project an interest expenditure of 4.2 billion lower.
Fiscal policy remains restrictive in the next four years, but less intensely: from 1.6 to 0.8 points of GDP, according to the change in the balance structural, which is confirmed-to return to breakeven in 2017. The planned balances are fixed as indicated in October, while the trend would have been much better.
The Government provides more resources for 0.1 points of GDP this year, the next 0.4, 0.1 in 2017 and 0 , 2 in 2018, using the flexibility granted by the EU to countries that adopt structural reforms. From spending review occorro-no other 10 billion in 2016 to avert the escalation of the tax burden with the increase in VAT and cutting subsidies and tax deductions.
The Bank of Italy survey on bank lending reports a shy easing supply in the first quarter, after the end of 2014. The capital position of banks and expectations of sectors and businesses are now judged favorable to ‘ lending. Credit demand is stable, as in 2014: two quarters has stopped declining for the investment while the rooms for working capital.
The business loans continue to decline: -0.6% in February, down 13.5% from September 2011 (-124 billion, seasonally adjusted CSC). In March, 10.9% of industrial enterprises did not get the required loan (6.2% in the first half of 2011, peaking at 16.6% in July 2013). Non-performing loans-no holding back new loans: increased to 133 billion in February (16.9% of loans), 25 to the end of 2008 (2.9%); the IMF has called for measures to reduce this burden.
continued slow the decline in interest rates paid by businesses: 2.4% in February, from 2.5% in January (3.6% in the set-ember 2013). Further decline will be favored by lower long-term rates induced by QE. This stimulates the demand for loans.
The price of Brent crude rose to $ 61.7 per barrel in April, from 52.4 in mid-March ( 112.2 in June 2014). The rise came despite Saudi Arabia has increased the extraction (9.8 mbd in March, from 9.6 in January) and the produc-tion USA remains the highest (9.3 mbd, from 8.7 in June 2014). In perspective, the removal of sanctions on Iran would open the way to its exports (0.9 mbd below the levels of 2012).
Even the prices of non-oil commodities have declined much from the highs of recent years. Among them: the fer-ro marks -58.1% in April from the end of 2013; corn is at -55.5% since summer 2012. Cotton prices rise (+ 8.1% in January), in-special regard to the course after the fall of 2014 (-33.4%).
The annual change in consumer prices in Italy denies it-tive (-0.1% in March), aligned with the Eurozone average. Energy prices fall (-6.5% per year), transferring the fall of oil prices on the purchasing power of households. The food prices rise (+ 1.0% per annum). Those core holding back (+ 0.3%, + 0.5% in February); close to zero dynamics of prices of industrial goods (+0.2%).
The ECB from March 9 to April 17 bought titles of ‘ Eurozone to 90.7 billion, the so-called Quantitative Easing (QE). Most are public securities (73.3 billion), which will add up covered bonds (15.5) and ABS (1.9).
The ten-year BTP yield is 1.45% in April (1.36% in early March), while the Bund fell to 0 , 10% (from 0.37%), with a spread of 135 points (99). For three reasons: the ten-sions on Greece renew the flight to quality to Germany; QE creates more scarcity on German bonds (purchased will be 14.1% of the stock, 8.3% of the Italian one); Italy grows in the average length of the stock of government bonds (6.45 years in March, 6.38 in December), after four years of decline, following the issue of BTP in the longer term (7.58 years at Tue -zo, from 7.40) that mitigates the impact of QE on their price.
In the wake of the QE, the euro continues to weaken against major currencies: 1.5% in April, the exchange rate effects-vo Nominal (-9.5% in December). In particular, with respect to the dollar devaluation slowed in April (-0.6%, to 1.08), but is wide year to date (-12.7%, 1.23 in December).
Accelerate the Eurozone economy. In March, the composite PMI rose to 54.0 (from 53.3 in February), the highest level for 11 months. The expansion is widespread both in manufacturing (53.6) and services (54.2) is the main euro area countries. It increased the already higher growth rate in Spain (composite 56.9) and Germany (55.4); acquired force, while remaining modest, in France (51.5) and Italy (52.4).
It increased again in March business confidence (+1.6 points), supported by the euro weaker, conditions of access to credit less restrictive and the fall in energy prices, which significantly reduces production costs. It is improved by 3 points household confidence, driven by the increased purchasing power and the decline in unemployment.
This results in a stronger expansion of do-domestic demand, as confirmed by the good performance of retail sales, up 3.0% in February compared with a year earlier, and the marked increase in March car registrations (+ 13.2% per year).
In the US the new decline in industrial activity in March (-0.6% of February) confirms the negative impact of the rise of the dollar and the weakness of global demand on an economy suffers, in the first two months of 2015, from severe weather conditions and unrest union in the ports of the West Coast.
The increase in retail sales (+ 0.9% nominal of February), driven in particular by car, prelude to a robust recovery in demand internal. It is, in fact, the strongest increase for a year and closes three months of contractions due to bad weather; the increased savings rate (5.8% in February from 4.4% in November 2014) offers margins spending.
Employment growth (just + 126 thousand units in March, but + 247mila on average from January 2014) and the gradual acceleration of wages will strengthen confidence families, already risen by 2.9 points, to 95.9 in April (detection Michigan). Which is also fueled by the strong gain in purchasing power, obtained thanks to the decline in gasoline prices (-34.9% from the beginning of July 2014) and the increase in the terms of trade. This will help reduce the parsimony.
The Chinese GDP decelerated to 7.0% per year in the 1st quarter of 2015 (from 7.4% in 2014) in line for hours with the target of the Government (“around 7.0%” this year). Services is iI greatest contribution, thanks to + 7.9% per annum. The March data prelude to a further slowdown in Q2: + 5.6% annual industrial production (from 6.8% in February), up 10.2%, retail sales (from 10.7% ). The economic policies of the Government will continue to drive the current slowdown. China, however, still provide the largest contribution to global GDP growth (33.0% in 2015).
The IMF has revised upward estimates of India’s growth in 2015 (7.5%, 6.3%) and Moody’s raised to “positive” from “stable” outlook on the public debt. In February, the industrial production accelerates: + 5.0% per year (by 2.8%).
Brazil in serious trouble: -9.1% in February (from 5.1%) of the annual change industrial production (+ 8.1% inflation in March, top since 2003). In Russia, consumer confidence fell to its lowest since 2009, worsening the already bleak picture painted by geopolitical tensions and oil.
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