The OECD revises downwards its estimates on Italy. «Slow global growth, Europe Vulnerable ‘- Il Sole 24 Ore

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This article was published on February 18, 2016 at 11:08.
the last change is the 18 February 2016 at 11:26.

the world slows, Europe is vulnerable and Italy grows poorly. It is an outlook characterized by great caution one published today by the Organisation for Economic Cooperation and Development, the body that brings together the most “rich economies” of the planet. The OECD in fact has revised downwards its estimates for the Italian GDP for 2016, providing for an increase of 1%, 0.4 percentage points lower than the Outlook of November. however confirmed the 1.4% estimated for 2017. The sharp cut in estimates on Italy comes in a context of worsening for the entire world economy.

For 2016, updating the intermediate than the semi-annual Outlook, the forecast is of a world GDP increasing by 3%, as in 2015, against 3.3% estimated in the Outlook of November and for 2017 the prediction stops at + 3.3% against + 3.6%, in both cases, a revision of -0.3 percentage points.

The global growth in 2016 “will not be higher than in 2015, which already marked the slowest rate in five years”, notes the OECD, explaining that the estimates have been lowered in light of recent disappointing data. Growth is slowing in many emerging economies, advanced economies are “a very modest recovery” and the low prices of raw materials depress the exporting countries. Trade and investment remain weak. The sluggish demand leads to low inflation and inadequate growth of wages and employment. In addition to this, “the risks of financial instability are relevant. Financial markets are reassessing the outlook for growth, which leads to the fall in stock prices and high volatility. ” In this context, the OECD emphasizes the need for “a stronger policy response to support the application. Monetary policy can not work alone. We must make greater use of fiscal and structural leverage “.

Negative Retouching estimates for the Eurozone, 1.4% and 1.7%, respectively 0.4 and 0.2 points less. “The slow recovery of the euro area is a strong brake on global growth and leaves Europe vulnerable to global shocks.” This is the Organization’s warning that combines the advanced economies. “Europe needs to accelerate the joint actions, find herself and speak with one, single voice,” the report said, highlighting the slow pace of reforms, especially in terms of the single market. As to the economy, the positive effect of the oil drop on economic activity was lower than expected and the very low interest rates and the decline of the euro have not yet led to increased investment. In many European countries, the high private debt and the mass of non-performing loans hinder the credit channel of monetary policy transmission.

The risk is that the euro zone remains trapped in low growth and low inflation, with a confidence in the medium term too weak to generate strong investment and innovation to strengthen the productivity and growth of ‘ employment. Such a scenario is to affect the banking sector, as evidenced by the sharp declines accused by the prices of shares and bonds of European banks.

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