The IMF improves the estimates for Italy for 2020, but cuts those for 2021. The economy is expected to contract by 10.6% this year, up 2.2 percentage points from the -12.8% forecast in June. GDP is expected to grow by 5.2% next year, or 1.1 percentage points less than the June estimates. The government in Nadef expects -9% this year and + 6% next.
Italian public debt is expected to rise to 161.8% in 2020 of GDP from 134.8% in 2019, before dropping to 158.3% in 2021 and 152.6% in 2025, the IMF also predicts a deficit of 13% this year and 6.2% the next (at 2.5% in 2025). Strong jump in the deficit also for France: it will rise to 10.8% of GDP this year with a debt of 118.7%.
In Italy the unemployed are also increasing. The Fund estimates an unemployment rate of 11.0% in 2020 for Italy, an increase compared to 9.9% in 2019. Next year the unemployment rate will rise further to 11.8%. The Italian rate is above the European average of 8.9% this year and 9.1% the next. In the euro area, Spain is worse than Italy, with 16.8% in both 2020 and 2021, and Greece, with 19.9% this year and 18.3% next.
Compared to pre-pandemic forecasts, global production losses from coronavirus will rise from $ 11 trillion in 2020-2021 to $ 28 trillion in 2020-2025. says Gita Gopinath, the chief economist of the International Monetary Fund, stressing that “this is the worst crisis since the Great Depression” and will likely leave “scars” in the medium term as the labor market takes time to recover and investments are held back by the uncertainty. The global $ 12 trillion fiscal stimulus and central bank actions “saved lives and prevented a financial catastrophe”
The Fund expects a “shallower recession” in 2020: world GDP will drop by 4.4% this year, less than the -5.2% estimated in June. In 2021, however, the recovery will be a bit slower than expected, with growth forecast at + 5.2%, or 0.2 percentage points less than the June estimates. The “economy is returning”, it is “emerging from the depths it slipped into in April” but the recovery will be long, uncertain “and” ready for relapses “.