Intesa Sanpaolo : Italy – economy more resilient than expected in 2023, higher risks looking into 2024.
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Weekly Economic Monitor – 23. June 2023
Intesa Sanpaolo – Research Department
We recently revised upwards our already-above-consensus growth forecast for 2023, to 1.2% from 1% last month (and from the 0.6% forecast six months ago), thanks to the positive surprise at the start of the year, and the sharp decline in energy prices. Conversely, we lowered our forecast for 2024, to 1.3% from 1.5% last month, due to the effects of monetary tightening and higher implementation risks on the NRRP.
The week’s market movers
In the euro area , focus in the week will be on preliminary estimates of consumer prices in June: inflation is expected to decline in Italy, France, and in the Eurozone as a whole (to 5.8% y/y), while in Germany a temporary increase is forecast due to unfavourable base effects in services. National confidence surveys in Germany and Italy, as well as the European Commission’s sentiment index, should confirm a weak picture for growth in the central months of the year, whereas employment data are expected to show little change in the unemployment rate, at levels that are still historically subdued. In France, consumer spending could rebound in part in May, after dropping for three months.
In the United States , focus this week will be on the core deflator for May, expected up by 0.3% m/m (4.6% y/y), with likely signs of moderation for core non-housing services. Also in May, personal spending should be up modestly in nominal terms and down marginally in real terms, whereas personal income is forecast to grow at a relatively sustained pace, thanks to the solid employment trend. New home sales should correct in May, in line with weak housing starts and new mortgage applications. Consumer confidence should recover in June, thanks to the resolution of the stand-off on the debt ceiling. The final estimate of 1Q GDP should be up by 1.4% q/q ann.
Appendix
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