FITCH CUTS ITALY’S 2020 GDP FORECAST TO -10%

Fitch has cut its forecast for Italian GDP in 2020 to -10%, down from -9.5% in its previous estimate but raised its 2021 forecast to +5.4%, from +4.4%.

The new forecasts came in its September Global Economic Outlook, the Italian news agency ANSA reported. Fitch said the new forecast "reflects the lower point of departure for activities and the announcement of an extra fiscal stimulus at the national level."

As for consumption, Fitch sees a 9.8% fall by year's end and a 5.6% rebound in 2021 followed by a 2% rally in 2022. Inflation forecasts are -0.5% this year, and +0,8% in both 2021 and 2022. Italy's unemployment rate, Fitch says, should reach 11.4% this year to then rise to 11.7% in 2021 and fall back to 10% in 2022.

"With the easing of lockdown measures in May, economic activity made a rapid recovery and this could lead to an intense rebound in the third quarter of 2020. But the recent high-frequency indicators suggest that there has been a loss in the momentum of growth in recent weeks," it noted. For his part, Economy Minister Roberto Gualtieri said recently that there would be a "robust" rebound in the third quarter after the unprecedented COVID-linked contraction. He said the year-end data may end up being "not far from the government's initial figures."

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