Global economic conditions have improved slightly, but several sources of uncertainty still cloud the outlook— especially in the United States, where the new administration has not yet fleshed out the details of its economic policies: the announced budget plans could have an expansionary impact—although this is currently hard to quantify—but the adoption and spread of protectionist trade measures could act as a drag on economic activity. Global GDP growth could be held back by turmoil in emerging economies as a result of the normalisation of US monetary policy.
The Euro area continues growing at a moderate, if gradually consolidating, pace. The risk of deflation has fallen; prices were up in December—although core inflation is still low. To maintain adequately expansionary monetary conditions and boost inflation, the ECB's Governing Council has extended its asset purchase programme until at least December 2017 or beyond, if need be. Starting from April 2017, the central bank will scale back its monthly purchases to 60 billion Euro.
INFLATION (YEAR-ON-YEAR PERCENTAGE CHANGE)
UNEMPLOYMENT RATE (PERCENTAGE)
The data shows that the Italian economy continued recovering during the autumn, albeit moderately. Industrial production, energy consumption and freight transport are all up, and business confidence indicators are currently at high levels: therefore, in the fourth quarter of 2016 GDP could have risen at nearly 0,2 percent compared to the previous quarter.
HOUSEHOLD SPENDING (YEAR-ON-YEAR PERCENTAGE CHANGE)
GDP (YEAR-ON-YEAR PERCENTAGE CHANGE)
In recent months, lending to non-financial corporations has continued growing, and also business lending is increasing—although growth remains modest. The credit quality of Italian banks continues benefiting from the improved business cycle, leading to a further decline in new non-performing exposures.
INDUSTRIAL PRODUCTION (YEAR-ON-YEAR PERCENTAGE CHANGE)
INVESTMENT PROJECTIONS (YEAR-ON-YEAR PERCENTAGE CHANGE)
Italy's economy is projected to grow by 0,9 percent in both 2016 and 2017, and 1,1% in 2018 and 2019. Domestic and, starting from 2017, a gradually strengthening foreign demand are expected to remain the main drivers.