Panetta (Bank of Italy): “Let us not delude ourselves, our economy is suffering from serious problems”

But for the governor of the Bank of Italy "we are not condemned to stagnation"

ROME – If a reversal of trend is possible in Italy, as can be seen from some signs of recovery, “we must not, however, have any illusions: our economy still suffers from serious problems, some of them deep-rooted and difficult solution“. This is the warning from the governor of the Bank of Italy, Fabio Panetta, who this morning presented the Final Considerations on the occasion of the publication of the Annual Report for 2023.

PANETTA: “ECONOMY IN DIFFICULTY BUT WE ARE NOT CONDEMNED TO STAGNATION”

Panetta paints a clear picture of our economy and does not hide the difficulties it finds itself in, from wages that are a quarter lower than in countries like France and Germany to the “ballast” of public debt, from the brain drain abroad up to the female employment rate “still at 52.5”. After all, “in the euro area, the Italian economy is the one with the lowest growth in product per inhabitant in the last quarter of a century” with “labour productivity remaining stagnant”, he underlines. But, warns the governor of the Bank of Italy, “we are however not condemned to stagnation. The recovery recorded after the pandemic crisis was higher than forecasts and that of the other large economies in the area. Contrary to what happened in crisis episodes of the past, was also intense in the South”. Therefore, according to Panetta “we must open the economy to competition and offer everyone the opportunity to valorise their talents. In the prompt recovery of exports and investments in the last four years we can read signs of restructuring of the production system and its newfound ability to compete on international markets”.

PANETTA: “HELP COULD COME FROM THE PNRR”

Substantial help for growth could come from the Pnrr: “It is crucial to revive the potential growth of the economy. The full implementation of the investments and reforms envisaged by the Pnrr – in addition to raising the product of more than 2 percentage points in the short term – would have lasting effects on growth due to productivity increases estimated at between 3 and 6 percentage points in a decade”.

PANETTA: “PREMATURE TALKING ABOUT DE-GLOBALIZATION. EUROPE MUST IMPLEMENT COMMON POLICIES”

As for the global context, the governor believes it is “premature” to talk about de-globalization but warns of the potential risks of a return to protectionism. In this framework, according to the governor of Bank of Italy, Europe must implement common policies and its own “strategic autonomy” in order to “strengthen the capacity for common action, mobilize the resources necessary to become an active part of the ecological, climatic and energy transitions is the way to overcome the current phase of obscurity”.