The Oecd cut the estimate of the Italian Gdp: +0.8% in this year and next – The Republic

the MILAN - the scissor motion of the Oecd estimates of growth in Italy: in its Interim Economic Outlook, the Organisation in paris has cut the forecast for the development of the economy of the Country with respect to the Economic Outlook of last June.

The recovery slows down. The Italian Gdp is now expected expansion of 0.8% in both 2016 and in 2017. The estimates of three months ago pointed to a rise of 1% in 2016 and 1.4% in 2017. The government will submit, by 27 September to the Rooms the updated note of the economic and financial Document, which will be revised down the forecast of last April. At the chapter of growth, the new framework of Palazzo Chigi should provide a 0.9% this year and an improvement at +1.1 and the 1.2% the next. The problem of slowing growth is not only Italy: the world Gdp will grow 2.9% in 2016 and 3.2% in 2017, and 0.1 percentage points less than the estimates of June. As for the euro area, the expected growth is 1.5% in 2016, and 1.4% in 2017, respectively, 0.1 and 0.3 points less than the put into the account previously. Germany should accelerate to +1.8% in this year (+0.2 points compared to the outlook in the spring), but to slow to +1.5% next (-0,2). For France, the estimates point to +1.3% in 2016 (down by 0.1 points), and in 2017 (a decrease of 0.2).

The growth forecast of the Oecd, with the revisions with respect to the estimates of last spring,

The weakness of the Italian flag. The downward revision of the growth estimates of the Italian is due to the fact that expectations on investment and trade, have not proved to be so fruitful as it was expected,” explained Catherine Mann, chief economist of the Oecd. “In the case of Italy we must recognize that there is a wide range of challenges,” he added, stressing, among other things, that will be one of the Countries most affected by the low growth of the euro area in 2017. If then you have been made “remarkable progress in the field of employment law”, which gave impetus to the recovery in terms of employment, “the idea was that this momentum would continue in 2016, but our hopes have been dashed”.

The trap of low growth. beyond The numerical aspects, the Oecd stresses that the world economy remains stuck “in a trap of low growth,” which has between the lights leading to the weakening of the trade flows. Not in the case, called the new Interim Economic Outlook: “the Alarm on global growth: trade light, distortions in financial. In the text it specifies that “the continuous disappointments on the growth weigh on growth expectations, which depress trade, investment, productivity and wages, which in its turn leads to a further downward revision of growth expectations and a weakening of demand”. The voice of commerce, it is noted that in the first quarter of 2016 “, the volume of world trade has dropped and, despite some recovery in the second quarter, the growth in global trade should be lower than that of Gdp in the year as a whole”. The framework “is well below the standards of the past and implies that globalization, measured by the intensity of trade, could have braked”. The “mediocre” numbers in global growth, “high inequality” and “wages are stagnant”, are “further complicating the political framework, making it more difficult to carry out polices that support growth and promote inclusion”.

Brexit and suffering. Looking to the Old continent, the Oecd reports that “so far” the result of the referendum on the Brexit “has had an impact as modest on the global economy, in particular on the euro area, also with regard to the trust and the assessments of financial markets on investment” but is “likely” that in 2017 “will emerge more negative effects on the Eurozone”. All eyes are then on the financial sector european: “Although credit growth in the Eurozone has improved, the high level of non-performing loans in some countries of the area continue to compress the prospects of growth”.

The alert to the central Banks. In the hot days for the central Banks, with reference to the decisions concerning the Fed and the BoJ, the development Organization launches an alert on the negative growth rates represent “an unprecedented situation” that “creates distortions and risks”, in particular as regards financial markets. According to the Oecd, “low interest rates support increases with the widespread and substantial asset prices, which increases the likelihood of a sharp correction in asset prices and the vulnerability to it”, we read in the text, “a rearrangement of rates in the financial markets could lead to a substantial re-pricing of assets and increase the volatility of the financial even if the rates remain below the averages of the long-term”. Among the side effects of cost of money close to zero then there is “the growth in property prices”. As well known by the bankers, then, “if kept beyond the horizon of the next two years, the low interest rates and negative pose problems for the business models and the sustainability of financial institutions.” The Oecd is in agreement with the Dragons, who have also appealed to the reforms and policy to boost growth, when he says that “in the absence of policy responses, robust in the field of fiscal and structural, the monetary policy suffers from an excessive load”. The document is addressed directly to the major central Banks: the Fed should “continue with a gradual increase in interest rates”, while a decided easing monetary policy remains “appropriate” for the Ecb and the Bank of Japan, which must be considered “with care” risks, costs and benefits of further expansion of Qe or new non-conventional measures.