Italy’s business lobby Confindustria said on Saturday, is expected to revise its growth estimate for the economy in 2021 despite a rebound projected from the second half of the year.
A monthly report published by its research unit CSC said the rebound seen starting in the third quarter of the year would be strong and could exceed initial estimates if Italy’s COVID-19 vaccination program was rapid and efficient.
Conversely, consumption and gross domestic product (GDP) would slow down in the first quarter as households put more money into savings amid uncertainty about the economic outlook and jobs, CSC added.
Consumer confidence would return once restrictions to control the pandemic were eased, it added.
Currently, it estimates Italian GDP to grow 4.8% in 2021. However, such projection does not include the effects of Rome’s next budget maneuver and resources made available by the European Union.
The report did not elaborate on the level of a possible future cut in the estimate.
Earlier this month, Economy Minister Roberto Gualtieri said Italy would post economic growth this year “not far below” Rome’s official target of 6%, set in September.
Italy’s economy
The Covid-19 virus outbreak led many European countries to lock down significant parts of their economies to contain the virus outbreak. These lockdown measures have had a marked negative impact on the Italian economy.
The whole country was in lockdown from March 9, 2020, until the end of May 2020, with dramatic consequences: in the first quarter of 2020, Italian GDP fell by 5.4% and in the second quarter by 12.4%.
GDP contraction was mainly related to a decrease in domestic demand and a slump in investment.
During the second quarter, the national industrial production index decreased by 17.5%, with production falling to an all-time low.
ISTAT, the Italian National Institute of Statistics, estimated that in March 2020, retail sales decreased, compared to February 2020, by 20.5% in value and 21.3% in volume; compared to March 2019, the value of retail sales decreased by 9.3% for large scale distributors and 28.2% for small retailers.
Overall, lockdown measures led to the suspension of activities for approximately 2.1 million in Italy, employing 7.1 million people.
Covid-19 has had a very diverse impact on different sectors of the Italian economy.
According to a study published by a leading Italian merchant bank, Mediobanca, during the lockdown period, the most impacted sectors were airline manufacturing (-22.1%), energy (-15.9%), fashion (-14.1%), and automotive (-9.1%).
The tourism sector, which represents 13% of Italian GDP by certain estimates, was also badly hit.
According to the latest analysis of ENIT, the Italian national tourism agency, since February 2020, international tourists have decreased by 58%, and domestic travelers by 31%, with an estimated economic loss of Euro 24.6 billion.
Moreover, the catering sector has suffered badly during the lockdown period.
According to analysis carried out by ISTAT, the catering sector has lost approximately Euro 13 billion during the second quarter of 2020. In the whole of 2020, it will ultimately suffer a loss of more than Euro 22 billion.
Based on analysis published by ISTAT, Covid-19 has had a severe impact also on the manufacturing sector (-15%), as well as mechanical (-18.8%) and domestic appliances (-22.1%).
On the other hand, Covid-19 has had a positive impact certain on other sectors.