Fast Market Research recommends "Italy Business Forecast Report Q2 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 06/24/2013 -- Core Views
Following the February 2013 general election we see three realistic scenarios for Italy's political trajectory over the next few months, only one of which is likely to offer any support to investor confidence.
However, even in a best case scenario we see little hope of significant economic reform, with a full-blown rejection of austerity plans and withdrawal of implicit ECB support the worst case scenario.
Lack of potential significant reform anytime soon seriously jeopardises Italy's long-term growth trajectory, and raises the risks that the public sector debt burden will become unsustainable.
View Full Report Details and Table of Contents
However, the very high public sector debt levels imply that Italy will eventually be forced to undergo a period of fiscal consolidation over the next decade, which will likely have negative implications for the country's social fabric, regional and global standing and governability.
Major Forecast Changes
We now forecast the Italian economy to contract by 1.3% in 2013, from our previous -0.8% forecast, as we believe the ongoing political deadlock will have negative implications for both consumption and investment. Should policy paralysis last into the second half of 2013 we may well revise down this growth projection further.
Recent political developments have also prompted us to revise up our fiscal deficit and public debt forecasts. We now expect the nominal fiscal deficit to reach 2.0% of GDP in 2013, from an estimated 3.0% in 2012, which implies a less impressive consolidation trajectory, and we expect public sector debt to 125% of GDP, from an estimated 120% in 2012.
Key Risks To Outlook
Given the huge level of political uncertainty, there are main risks to our forecasts. The main ones are that we are underestimating the negative impact on domestic demand, which could mean the growth is much weaker than even our own below consensus forecasts. This would also exacerbate the fiscal and debt problems facing the next government, potentially leading to a more rapid unwind of investor sentiment towards the economy.
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Country Reports research reports at Fast Market Research
You may also be interested in these related reports:
- Brazil Business Forecast Report Q3 2013
- Germany Business Forecast Report Q3 2013
- Hungary Business Forecast Report Q3 2013
- Philippines Business Forecast Report Q3 2013
- Russia Business Forecast Report Q3 2013
- Cote d'Ivoire Business Forecast Report Q3 2013
- Trinidad & Tobago Business Forecast Report Q3 2013
- Singapore Business Forecast Report Q3 2013
- Bulgaria Business Forecast Report Q3 2013
- Chile Business Forecast Report Q3 2013