Italian policy vacuum in an unfavourable economic context
The resignation of Prime Minister Mario Draghi is going to leave a policy vacuum in Italy. Snap elections are now very likely and will probably be held in October, around six months earlier than planned, leaving the country without a fully functioning government for the next few months, in an unfavourable economic context.
What you will learn:
- We were already forecasting a marked slowdown in the second half of this year, with GDP growth at only 1% for 2023.
- Draghi’s resignation will bring back some market turbulences. This could result in further negative shocks for the Italian economy, via lower confidence and even tighter banking credit standards.
- Moreover, depending on the outcome of the elections, it could result in financial markets questioning again the Italian fiscal sustainability.
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