Monthly report on Italian economy

In the past few weeks, the global outlook is showing first signs of recovery due to the end of the lockdown and the effects of expansionary policy measures implemented in support to households and firms.

In May and June, the Italian indicators showed some improvements of economic activity following the strong decreases in March and April. In May, extra Eu exports increased and in June the confidence improvement was diffused to all sectors.

Recent data on incomes, consumption and labour market reflect the impact of expansionary policies, contrasting the fall of personal income that turned out in an increase of the saving rate in the first quarter and of retail trade in May. The decreasing trend of employment has continued although at moderate pace, while weekly working hours and unemployment rate increased.

In Italy, the deflationary trend started in May continued while inflation accelerated in the euro area, widening the gap of Italian inflation with respect to those of its main European partners.

In the focus, the previous analyses on the pandemic’s effects on firms are deepened. The main features and factors of production recovery are highlighted. Overall, the business sector is resilient although some critical obstacles to recovery are present for micro-firms and firms in highly affected sectors by the lockdown.