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Intesa Sanpaolo : Italy . The new Government’s fiscal plan envisages an accommodative stance of fiscal policy

Intesa Sanpaolo : Italy . The new Government’s fiscal plan envisages an accommodative stance of fiscal policy for the whole 2021-23 horizon, with an increasing role over time in the use of resources from the European Recovery Plan.

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Weekly Economic Monitor – 09. October 2020 

Intesa Sanpaolo – Research Department


However, the path outlined for reducing the debt ratio does not appear entirely credible, as it rests on overly optimistic forecasts for GDP growth.

The week’s market movers

In the Eurozone , only a few monthly indicators will be released this week. The German ZEW, the first confidence index to be released for October, should correct, after improving significantly over previous months. Eurozone industrial output will slow in monthly terms in August. The second reading of September inflation should confirm the decline of the advance estimate. By Thursday, the individual governments will have to submit to the Commission their Draft Budgetary Plans, that will point to significantly expansionary fiscal policy in 2021 as well.

Busy calendar of important data releases this week in the United States . The first set of manufacturing sector surveys for October should confirm a moderately expansionary scenario for the autumn months. Consumer confidence in October should be confirmed stable at levels still lower than in February, but consistent with a positive consumption trend. Industrial output in September is forecast to rise sharply, driven by robust manufacturing, in light of Employment Report data on working hours and payrolls. Consumer and producer price indices should show a normalisation of monthly changes, at around 0.2% m/m for both the headline and the core indices.


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Source: BONDWorld