Bank of Italy, 300 thousand more employees from the NRP in 2024. Economy already in contraction in the summer

Italian economy already in the red in the summer quarter, “also due to the strong increases in energy costs and uncertainty about the evolution of war in Ukraine“This is what the Bank of Italy notes in its Economic Bulletin, in which it records that” the slight decline in industrial production is accompanied by signs of weakening in construction. On the other hand, activity in the tertiary sector would have remained stable, thanks to the still positive contribution of the tourism and recreational sectors. On the demand side, household spending is being held back by the loss of purchasing power due to high inflation “.

The document crystallizes the forecasts recently anticipated by via Nazionale, which downwards the growth estimate for 2023 but still keeps it positive: + 0.3% the GDP trend expected for next year against the + 0.6% that the outgoing government wrote in the Update to the Def. “Our most recent estimates – we read – indicate that in a baseline scenario, GDP would increase by 3.3 percent over the current year as a whole, slow down to 0.3 in 2023 and grow by 1.4 in 2024. However, these projections remain subject to strong downside risks. Consumer price inflation would stand at 8.5 per cent on average in 2022, falling to 6.5 in 2023, and then rising to just over 2 percent the following year. In an adverse scenario – in which a stoppage of Russian gas supplies is assumed from the last quarter of 2022, a new rise in energy prices and a more marked slowdown in world trade – the product would contract by more than 1.5 per one hundred in 2023 and would return to moderate growth in 2024; inflation would continue to rise next year as well, exceeding 9 per cent, and then fall sharply in 2024 “.

On the labor market front, the Bulletin reports a slowdown while the wage dynamics remain contained. On the one hand, this extinguishes the possible fears of a spiral of price-wage run-up, but on the other hand it also signals the loss of purchasing power of families which are increasingly subject to inflation. According to the document, “employment continued to grow in the second quarter; however, signs of a slowdown emerged in the summer months. Business expectations for employment also worsened, while remaining compatible with an expansion in labor demand. contractual wages remained moderate overall: the most recent renewals established wage increases, for the period of validity of the contracts, in line with inflation forecasts net of the imported energy component; in the sectors most affected by the pandemic, the share of employees awaiting renewal “.

An in-depth study which, again on the subject of employment, via Nazionale dedicates to expected effects of the NRP. The Italian Recovery will be a strong driver for our economy, provided that investments and reforms are implemented, including for employment. According to the analysis contained in a box in the Bulletin, “the additional employment in 2024, the year of peak spending, was estimated at around 300,000 people”. According to the experts of Via Nazionale, the jobs will come “for four fifths” from the private sector. The buildings will have the lion’s share, about 65,000 units. Less strong but with a “marked turnaround” compared to 2014-2019 the sectors of computer production, electronics and optics and research and development.

The estimates, explain the experts of the Bank of Italy, “do not take into account the further positive effects on growth that could derive from the complementarity of public spending with private demand, as well as from the stimulus to total factor productivity”. If these components were also considered, the effect on output would be greater, raising employment to levels substantially compatible with those – higher – estimated by the government. The skills required in the jobs activated by the NRP “would be highly heterogeneous”. According to estimates, one is expected higher incidence of professions with a high analytical content, due to the growth of sectors that employ skilled employment and the specialist nature of many infrastructure investments. The increase in demand for this type of professionalism could be satisfied by interventions in tertiary training or by policies aimed at attracting personnel with high levels of education from abroad, concludes the research.