The Italian Institute of Statistics (Istat) forecast a strong GDP contraction in 2020 (-8.3%) followed by a recovery in 2021 (+4.6%).
This year, the fall of GDP will be determined mainly by domestic demand net of inventories (-7.2 p.p.) due to the contraction of household and NPISH consumption (-8.7%) and of investments (-12.5%).
Net exports and inventories will also contribute negatively to GDP growth (respectively -0.3 p.p. and -0.8 p.p.).
Employment in sharp decline
Employment trend will follow the GDP trend with a sharp fall in 2020 (-9.3%) and a recovery in 2021 (+4.1%).
The trend of unemployment rate will be different because it reflects the ricomposition between unemployed and inactive people and the fall in hours worked.
The households final consumption expenditure deflator will display a negative trend this year (-0.3%) and will marginaly recover the next (+0.7%). followed by a recovery in 2021 (+4.6%).