Italy economy 2020

Italy is the European country currently most affected by the virus, with the highest number of cases and fatalities. Whether even more aggressive or creative action may be required in the coming weeks or months, no one knows. The initial reaction to the measures announced by the European Central Bank was mixed. But unlike the sovereign debt crisis — which first affected Greece and then Italy, Spain and Portugal — there is no political or economic divide between the needs of the core and the periphery of Europe in the face of the coronavirus challenge.

Unemployment and government debt are also high relative to the rest of the euro area, while levels of government investment — a decade ago on par with the rest of the euro area and the UK — are now significantly lower.

italy economy 2020

Unsurprisingly, therefore, on a number of market-relevant variables the Italian banking system registers toward the weak end of the European spectrum: adversely hit by a high proportion of non-performing loans 7. As Italy and much of the region probably now faces a technical recession, all eyes are on whether the fiscal and monetary measures being introduced will prevent a health emergency from becoming an economic emergency, with companies and households unable to pay their debts.

Precisely how bad the Italian and euro area economic data will turn out to be over the first half of this year is hard to estimate. With other parts of Europe now seeing school closures, parents staying at home to look after their children, restaurants and other retailers shutting their doors and consumer spending on non-essential goods and services being put on hold, other countries will undoubtedly see a similar situation unfold.

The only question is one of timing. Another concern is that even if the immediate crisis ends up being contained over the coming months, the aftershocks could linger well beyond that, as the summer tourism season is wiped out and businesses lose a huge portion of their annual revenues.

In southern Europe, that could mean the banks face another wave of loan defaults, national governments take in much lower than anticipated tax revenues, and the markets then question the sustainability of government finances and whether the weakest banks across Europe can get by without having to raise additional capital.

Faced with these risks, European policymakers are stepping up their response. Fiscal policy, as expected, is leading the way, with the governments looking at a variety of measures, including postponing tax collection, allowing households and businesses to delay mortgage and loan repayments, giving banks the regulatory leeway to allow customers to postpone debt interest payments, helping the self-employed with cash payments, and governments underwriting emergency loans to small and medium-sized enterprises.

Similarly, the ECB responded last week by expanding the size of its quantitative easing programme and by providing banks with the ability to borrow money at even lower rates. The hope is that these actions are transmitted into the real economy, lowering borrowing costs for governments, households and companies, and will lay the foundations for a stronger recovery once the worst of the epidemic is behind us and economies start to claw back whatever output will be lost over the coming months.

In the current crisis, however, every government and central bank is committed to this maxim — and Europe is stronger for it. Reuse this content. Order by newest oldest recommendations. Show 25 25 50 All. Threads collapsed expanded unthreaded.

Loading comments… Trouble loading? Most popular.The tourists are leaving Italy. Facebook Twitter Email. Traveling while Asian during the pandemic.

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Gupta demonstrates how to stay safe on a road trip. Cherry blossoms at coronavirus ground zero. Zookeeper's dance routine delights online viewers. After emerging from what was in earlyone of the world's harshest coronavirus lockdowns, Italy managed to dust itself down in time to welcome visitors.

But as the sun begins to cool, so do hopes of a full recovery for Italy's decimated tourism season. Winter is coming, and with it what is expected to be a full-blown economic catastrophe. The Italian government, like many across the world, has been doling out cash to help support many ailing businesses and individuals, but with many global travel restrictions still in place, lost revenues from the country's faltering travel industry leaves a gaping financial hole that must now be filled.

Anyone visiting Italy in August could've been forgiven for thinking almost everything was back to normal, bar the facemasks and social distancing. Culturally set in stone as a holiday month for Italians, it saw many locals enjoying a hard-earned break as best they could. Even with hopes of growth and recovery two years down the line, the pain, he adds, is likely to be widespread.

Adding to the problems is a rise in Covid cases blamed on the movement of young Italians, both over the borders into countries like Croatia, Greece and Malta and to summer nightlife hotspots at home.

italy economy 2020

Daily increases are lower than France and Spain, but Italians are nervous about the approaching winter. Fears of a second wave appear to have dashed earlier projections of a September and October tourism revival, with Italians and overseas visitors canceling plans and sitting tight.

Professor Richard Wolff: Coming Economic Crash Will be WORSE Than Great Depression

Business owners now feel that government talk of the Italian summer as a domestic boost to tourism was just rhetoric. Unbridled optimism coupled with images of packed Italian beaches for the popular August 15 ferragosto holiday were, they say, just a smokescreen for an industry on the verge of collapse. The statistics certainly paint an uglier picture. The ongoing travel ban that prevents Americans -- one of Italy's biggest sources of tourism -- from entering is also having a particularly brutal impact.

Italy enjoyed a revival in domestic tourism this year, but not enough to counter the drop in overseas travelers. She says it's the first year she has seen zero profits from Italy vacation planning.

Like so many, she has had to reinvent her business. Together with locals on the Amalfi Coast where she is currently based, Santoro launched a digital story series LifeBeyondTourism AmalfiCoastLocals showcasing businesses that usually rely solely on tourism.

She says that during interviews, "We have heard more than once, 'If the borders remain closed for the remainder ofwe will not have money to buy food for our family by January. Forza and coraggio strength and courage are what Italy knows best. Food tour company Casa Mia usually schedules bespoke food and wine activities across Italy non-stop from March to October.The new forecasts, along with public finance projections, will be published next week, providing the framework for the budget which must be presented to the European Commission in mid-October.

The new forecasts, which still need to be finalized, are based on an unchanged policy scenario. This means they do not incorporate planned expansionary measures to be financed by the European Union's Recovery Fund, the sources said. Among a raft of projects under discussion, the government wants to create a national ultra-fast broadband network, upgrade its rail lines and spend more than 30 billion euros in six years to strengthen its healthcare system.

In a paper published this week, the government said Europe-funded reforms could help Italy double its growth rate, narrow its north-south divide and even increase its birth rate - one of the lowest in the world.

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In April, the government of the anti-establishment 5-Star Movement and the center-left PD party forecast a fall in gross Monday, 21 September PM. Newsmax Media, Inc. Click Here to Load Comments Newsmax Comment Policy Keep discussions on topic, avoid personal attacks and threats of any kind.

Please read our Comment Policy before commenting. All Rights Reserved.Even before the current lockdown it was facing a fourth recession in little more than a decade and there has been only minimal growth in living standards in two decades. Its manufacturing sector is dominated by low-cost producers vulnerable to disruption in the global supply chain. Put simply, if there was one EU country that the European commission in Brussels and the European Central Bank in Frankfurt would have chosen to avoid a severe coronavirus outbreak it would have been Italy.

The issue is not whether Italy will have a recession. With schools, universities, theatres and cinemas shut and its hugely-important tourist industry facing a washout summer, the economy is going to shrink in both the first and second quarters of Nor is it really a question of how deep the downturn will be, although early estimates are that it is going to be a bad one. That assumes the quarantine lasts until the end of April and is then gradually lifted.

Were the economy to remain effectively immobilised until the end of June, he says there could be a 4. It is reasonable to assume that government economists in Rome are coming up with similar sorts of projections, hence the mortgage holiday.

This would represent a form of helicopter money — cash drops to see consumers through hard times — in the event that households were never required to make up for the monthly mortgage payments they will avoid. Details of the scheme remain hazy, but it is highly unlikely that the Italian government has gone this far.

For one thing, its banks are already stuffed full of bad loans and can ill-afford a permanent blow to profits. For another, helicopter drops would have to be underwritten by the ECB. The chances of it doing so are remote. That said, for the rest of Europe Italy is a country that is too big to fail. As it might. The tourist industry is effectively dead for Fiscal stimulus could be counterproductive if, as is possible, investors demand a much wider credit spread to accept fresh Italian paper.

Italy will need massive support from eurozone partners to avoid going the way of Greece. The expected targeted help to small and medium-sized businesses with their cashflow will be largely cosmetic.

Do they take the opportunity to rebalance policy so that governments have greater leeway to borrow and the ECB is not required to provide all the stimulus? Or do they treat Italy the way they treated Greece and insist there is no alternative to austerity?

The tourists are leaving Italy. Now catastrophe looms

Italy is much bigger than Greece and the consequences of making the wrong choice should be obvious. Topics Italy. Reuse this content. Most popular.London CNN Business Italy has imposed sweeping nationwide restrictions on travel and public life, a desperate attempt to contain the coronavirus outbreak that looks set to plunge the world's eighth largest economy into a steep recession.

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United, American and Delta drop change fees. Permanent work from home is here. Will cities survive? Movie theaters are reopening.

We asked an expert if it's safe to go. Lavender sales are soaring due to Covid Here's why. Covid is driving millennials out of cities and into first homes. The measures announced late Monday include travel restrictions on 60 million residents, a ban on public events, the closure of schools, movie theaters, museums and gyms, and limits on opening hours for restaurants, bars and shops. The government took action as the number of deaths caused by coronavirus reached and infections topped 9, more than double the number reported in China as a share of the population.

The restrictions are in place until at least April 3. Taken together, the unprecedented measures are likely to push an economy that contracted in the final three months of into a sharper downturn that will put Italian hotels, travel companies and restaurants under intense pressure.

A 'short, sharp' global recession is starting to look inevitable. Read More. The hit to GDP will be "much bigger" if the restrictions are extended until the end of June, he added. Economists at Goldman Sachs expect the restrictions to shave 1. Fiat Chrysler FCAU on Wednesday announced that it is cutting production rates and temporarily closing four plants in Italy to minimize the risk of the virus spreading among employees. A spokesperson said the plants are expected to reopen on March To limit contact between staffers, the company also said it will increase space between employees at their workstations.

But the carmaker warned that it's "still too early to give a detailed forecast of impact on business. Supermarket chain Esselunga said it is implementing social distancing in stores, in accordance with government rules requiring that shoppers and restaurant patrons remain at least three feet apart. Containment efforts are likely to plunge the restaurant and tourism sectors into crisis, said Stefano Manzocchi, chief economist at Italian trade association Confindustria.The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family-owned.

These activities are most common within the agriculture, construction, and service sectors. Italy is the third-largest economy in the euro zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets.

italy economy 2020

Investor concerns about Italy and the broader euro-zone crisis eased inbringing down Italy's borrowing costs on sovereign government debt from euro-era records.

The government still faces pressure from investors and European partners to sustain its efforts to address Italy's longstanding structural economic problems, including labor market inefficiencies, a sluggish judicial system, and a weak banking sector.

Inoverall unemployment was GDP growth is projected to slow slightly in No claims are made regarding the accuracy of Italy Economy information contained here. All suggestions for corrections of any errors about Italy Economy should be addressed to the CIA or the source cited on each page. For example, it assigns unemployment rates in increasing order, whereas we rank them in decreasing order.Are you interested in testing our corporate solutions?

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An Italian financial crisis is certain – the big question is how contagious it is

State of Health. Distribution of coronavirus cases in Italy as of October 6,by age group. As a Premium user you get access to the detailed source references and background information about this statistic.

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Italy Sees GDP Down 9% This Year, Rising More than 5% in 2021

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Premium statistics. Read more. Different estimations on Italy's GDP growth have been published since the outbreak of the coronavirus pandemic. Some of the most recent data, published in Julyreveal that the gross domestic product in Italy is projected to decrease by Similarly, a forecast from May estimated that this figure might drop by 9.

An economic outlook published in December forecasted a slight growth for For a wider overview on the economic impact of the coronavirus in Italy, please consult this dossier. GDP growth forecast for according to different sources in Italy.