Bank of Italy slashes 2014 GDP forecast to 0.2% from 0.7%

Author: Ryan Littlestone | Category: Central Banks

That might be a big chunk of the reason for the drop in the euro.

  • Sees risks to the downside on that forecast as well
  • Sees Q2 GDP “Approximately stationary”
  • GDP forecasts assume coherent implementation of measures to support growth and recovery in eurozone
  • Should not underestimate the risks from emerging market economies and a financial market downturn
  • Geopolitical risks connected with oil producing countries have risen which could affect energy prices

Market estimates GDP +0.1% for Q2 and Q1 was -0.5%, so they’re priming for a big miss and a continuation of the recession

Other forecasts

  • Sees 1.3% growth in 2015 (consensus is 1.0%, their previous forecast was 1.0%)
  • Sees 0.4% inflation in 2014 and 0.8% inflation in 2015
  • Says government needs to boost reform efforts to finally exit recession

On seeing the news our very own Adam Button said;

“There were rumors of the downgrade earlier in the week but it’s a bit of a surprise to see such a dramatic cut from the January forecast. The consensus is 0.3% and official forecasts always tend to be a tough stronger than private forecasts.”

 

Overall, a dour view from Italy.

 

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