Industrial production is in free fall, investment is at a standstill, savings are at stake: the Italian economy is not looking as healthy as Prime Minister Meloni would like us to believe. The data announced by Istat and Consob today, despite the distorting effect of Pnrr on growth forecasts, draws a pessimistic scenario for our country’s economy by overshadowing the GDP forecasts that praise the members of the government. How are things really? Let’s try to answer this question by drawing a complete picture of the situation (data at hand).
Production collapse a “warning bell”
A few days ago, the OECD revised upwards its growth forecasts for the Italian economy, forecasting a 1.2% GDP growth in 2023. . According to the Prime Minister, the Italian economy is apparently responding well to the government’s actions: “It’s not a flash in the pan. Italy has reached an all-time record in terms of number of employees and stable contracts, citing job insecurity. And everything is driven by female employment”.
If the PM thinks that GDP estimates and employment data are sufficient to gauge the health of an economy (not counting, moreover, that many people live in poverty despite working), how does he justify the disappointing data released by the US today? ‘Statistics on industrial production? According to the national statistics office, production contracted -7.2% year-on-year in April; this is the worst since July 2020 (right after the outbreak of the pandemic), when the decline was 8.3%. Data on a monthly basis are also bad: -1.9%, a negative record since September 2022 (-2.2%). The Confcommercio research office is signaling a possible downside trend in May, warning that the sharp decline in industrial production in April “is undoubtedly an alarm bell for the health of our economy.”
Families and businesses in distress
The collapse of industrial production proves in practice that companies have not survived the energy crisis unscathed. First of all, wood, paper and printing companies (-17.2%), electricity, gas, steam and air supply (-13.6%), manufacture of chemical products, metallurgy and manufacture of metal products (for both – 10% .9) sectors) and consumer goods (-7.3%).
“It’s a Caporetto for both our companies and the country,” says Massimiliano Dona, president of the National Union of Consumers (UNC). “The record is out of a rebound -” he says. The negative trend in industrial production has not continued for the fourth consecutive month, according to seasonally adjusted economic data, but the decline is a chasm. .The collapse of consumer goods of -7.3% in April 2022 shows the lack of income policy and the urgent need to restore the spending power of families, Maintaining their strength ‘do not buy, otherwise Italians will not consume, companies will not produce’.
Savona (Consob): “Risks for democracy”
The industrial sector is indeed in crisis, and this is demonstrated by the 15 companies leaving the listed Piazza Affari in 2022. This is the highest farewell and worst income-expenditure balance since 2010. The situation is so dire that even democracy is at risk. President Paolo Savona said, “Inflation is like a Hydra with many heads; if one is cut off and cauterized, the others take action,” and “high inflation also creates conditions for the deformation of democracy and the emergence of forms of societal violence.” Consob notes in its annual report that “increases in the cost of living have hitherto been transferred to taxation, not to more stringent wages.”
Collapse of industrial production, government minimizes
We are witnessing a deadly silence on this (disastrous) data, while positive comments pour in from government officials on the success of placing Btp Valore, a government bond reserved for small savers. Only Italian Minister of Business and Mines, Adolfo Urso, tried to make a statement, arguing that Italian industrial production was “affected by the blockade of a part of the European economy, especially the German one”.
As such, the government is trying to minimize it for the time being because, in the words of M5’s vice president Mario Turco, the “Melonian orchestra on the Titanic” has been unable to do anything else, given that it celebrated its GDP growth forecasts just a few days ago. .
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
