CSC: costly energy and its impact on 2022 GDP

10 March 2022

According to the Confindustria Studies Center’s January economic outlook, the unknowns concerning the rise of italian economy have gotten denser in 2022. With the sharp rise in energy prices, eroded profit margins, scarcity of commodities and increase in contagions, Italy’s GDP – already estimated to have slowed down in the final quarter of 2021 – could in fact come to a standstill in the first quarter (-0.8% the impact on an annual basis).

The energy cost increase will particularly impact manufacturing, whose output is expected to drop after the average +0.7 registered in October/November. “The unsustainable cost of gas (up 723% in December from the pre-crisis period) and of electricity in Italy, added to price hikes for other inputs, is causing the temporary closing of companies in the energy-intensive sectors”, the CSC emphasizes.

In regard to services, the high number of Covid-19 contagions is putting a brake above all on tourism and family travel. This could again put a brake on out-of-home expenditures,  with a recoup in consumption (a gap of -3.6% from before the pandemic, all in services) that could halt.

Chiaroscuro for Italy’s exports, too: after a robust rebound in foreign demand in the last part of 2021 (+2.2% in value in October/November) the scenario for the new year is very uncertain, given the difficulties with supply and rising prices. What is worrying CSC analysts most is the climate of lack of confidence and fear that is gripping the Eurozone and the slowdown in the US economy – where last year ended with an unexpected downturn in manufacturing of 0.1%) – while the emerging countries (China and Russia in particular) are growing more slowly than expected.

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