eco TV Week


Italy: why the country is once again attracting attention   5/7/2021

The arrival of Mario Draghi as head of the Italian Council in February has sparked renewed attention for the country. The former ECB president seems to have given a clearer political path and will oversee the implementation of the massive €235 billion stimulus package. The latter legitimately raises a lot of hope in the peninsula.

Eurozone: Ongoing fiscal support   4/30/2021
European public finances have been put to the test by the economic recession, health spending and massive state support for businesses and households. By releasing the first estimate of public debts and deficits in the area, Eurostat revealed the bill, at least for 2020.

Israel: A mixed economic situation, but positive prospects   4/23/2021
In Israel, restriction measures have been very stringent, and have severely affected consumer demand. The unemployment rate and the fiscal deficit reached record high levels in 2020. However, high-tech exports and fiscal support have softened the economic recession. A very active vaccination campaign should accelerate the recovery, but political uncertainty will continue to weigh on the fiscal outlook.

Emerging countries: speed races   4/16/2021
In their spring outlook, the IMF economists expect to see a multi-speed and incomplete recovery of the global economy in 2021. Indeed, speed is the key word for 2021 because the emerging countries are racing against time on several fronts.

Eurozone: green shoots of recovery   4/2/2021
The green shoots of recovery are becoming increasingly visible in the euro area. Importantly, the improved sentiment is spreading to different business sectors as well as households. Several factors underpin these developments. 

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On the Same Theme

Economic improvement, but unemployment on the rise 4/19/2021
Italy’s cyclical improvement continues. This is reflected in our pulse, with several indicators rising above their long-term average. This is especially true for indices pertaining to industrial activity. The Purchasing Managers Index (PMI) for the manufacturing sector rose to its highest level in 21 years.
The way to recovery gets longer 4/9/2021
In 2020, real GDP fell by 8.9%, with almost 2.5 million of full-time equivalent jobs lost. The decline in consumption was the main driver of the recession, accounting for three fourths of the economic downturn. Stagnating incomes and the lack of confidence increased households’ propensity to save. The services sector was the most severely affected by the crisis, with value added declining by 8.1%, while manufacturing benefitted from the moderate recovery of exports. The problems raised by the pandemic combined with -and worsened- structural issues that had been slowing down the country’s economic growth up to now. In the years to come it will be hard to implement a solid growth pattern without decisive interventions that would foster innovation and productivity.
The industrial recovery gathers pace 2/26/2021
As shown in our barometer, manufacturing activity has continued to strengthen at the beginning of the year. The manufacturing PMI index reached 55.1 in January, the best reading since March 2018. Italian industry is probably benefiting from activity in the US, which is stronger than in Europe...
Political risk arises again 1/29/2021
Italy is one of the rare European countries whose propagation of the epidemic is still under control at the end of January, although the situation is still very delicate. On top of these health uncertainties, political risk is also on the rise again.
Coping with the second wave 12/17/2020
Following an impressive decline in the first half of 2020, the Italian economy rebounded over the summer. Value added rose strongly in construction and manufacturing, while the recovery in the services sector was less substantial. Favourable indications also come from house prices invalidating the darkest scenario depicted at the beginning of the pandemic. To contain the second wave of infections, the Italian Government has taken restrictive measures, with negative effects on activity. The economy is expected to decline in Q4 again. This contraction should be less significant than in the first half of the year, with only a moderate impact on 2020 growth, while the carry- over in 2021 should be more sizeable.
The recovery at a standstill 11/27/2020
The marked improvement in the barometer shows that the rebound in economic activity was encouraging up to mid-October, before the epidemic picked up speed again. As in other countries, the pick-up in activity was concentrated in the industrial sector. The manufacturing PMI reached 53.8 in October (its highest level since March 2018), driven by a marked improvement in the new export orders component (+4.5 points to 55.8). Conversely, the services sector PMI fell by 2.1 points to 46.7...
Decrease in non-performing loan ratios might soon end 11/18/2020
While Italy's real GDP fell by 12.8% q/q in the second quarter of 2020 (after -5.5% in the first quarter), the non-performing loan (NPL) ratios of sectors of activity that have been subject to administrative closures, in particular, continued to decrease. Surprising as it may seem, this development can be explained. On the one hand, public guarantees on new loans have contributed to increase the outstanding amount of "healthy" loans to these sectors[1], diluting NPL ratios. On the other hand, sales of NPLs continued in 2020 (albeit at a slower pace than in 2019), which reduced the outstanding amount of NPLs and contributed to the cleaning up of bank balance sheets. The decline in NPL ratios in Italy may nevertheless be coming to an end as most of the moratorium periods granted have expired. Therefore, some loans could soon be more than 90 days past-due, which is one of the two criteria for classifying a loan as non-performing[2]. NPL ratios in the sectors of activity most heavily affected by the health crisis in Italy   [1] Banca d’Italia, 2020, Economic Bulletin, Number 4 – October [2] The other is the debtor being unlikely to pay its creditor obligations in full, which might imply realization of collateral.
Caught up by the second wave 10/16/2020
After keeping the epidemic at bay for most of the summer, Italy is now facing a strong resurgence in the number of Covid-19 cases. Last Tuesday (October 13), the government decided to tighten health restrictions, including the closure of restaurants, cafes, and nightclubs at midnight...
Towards an uncertain recovery 10/1/2020
In Q2 2020, real GDP fell by 12.8%, dropping down to values recorded in the 1990s. A weakened domestic demand was the main driver of the recession, with households reducing their expenditure and investment falling by 15%. The contraction became widespread. The real estate sector sent mixed messages: in Q1 2020 prices went up while transactions experienced a sharp decline. Latest data have signaled a rebound of the economy, even if the scenario remains uncertain. The strength of the recovery will depend on the behaviour of businesses and households, which will in turn be affected by the evolution of the pandemic. In the real estate sector, both prices and transactions should experience a sharp decline by the end of the year. Transactions should only partially recover in 2022. 
Disinflationary pressures in services increase 9/11/2020
The economic recovery has been stronger in the industrial sector than in services, the former benefitting from a sharp rebound in consumer goods spending, particularly durables. Moreover, the impact of health measures on industrial activity is lower than for services...

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