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ITALY: Uncertain Government formation, Light Signs of Economic Recovery

At the Parliament elections, no political faction obtained the absolute majority to lead the country alone. The Euro sceptical movement “5 Stelle” is the single winner but was overtaken by the right alliance. It is difficult to foresee the installation of a stable coalition government.

The danger of a crisis of the banking system has diminished. Thanks to the economic recovery, the portfolios of the banks and the part of default risky credits are progressively decreasing. However, the sector still does not contribute to the economic growth, which lacks real leading factors.  

However, last year the GDP (+1.5%) scored its highest growth since 2010. The industrial PMI (59.0) points out the clearest acceleration of the past seven years. Households’ consumption and exports are increasing. Because of the over proportional imports rise, the trade balance slows down the GDP growth.

Despite the end of the fiscal impulses to support the economy, the GDP should sufficiently grow to further reduce the debt-GDP share (’17: 131.5%). Surpluses in the primary balances (without interests) have been reached since 2011. The treasury benefits from low interest rates but public finances do not take advantage of the present economic expansion.

Prometeia institute estimates that in 2018 the ECB will buy 69 Bio. EUR less of Italian bonds compared to last year. According to the economist Kenneth Rogoff, Italy could suffer from the debt crisis with debt refinancing problems similar to Latin America during the eighties when in the rich economic countries growth and real interest rates (globally) grew simultaneously.

April 2018

ECSA Chemicals AG
Burgauerstrasse 17
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ECSA Maintenance AG
Burgauerstrasse 17 
CH-9230 Flawil (Switzerland)

Via Luigi Favre 16 
CH-6828 Balerna (Switzerland)

T. +41582119300
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ECSA Energy SA
Via Luigi Favre 16 
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con Unico Socio
Via Lavoratori Autobianchi 1 
I-20832 Desio (MB)
(Stabile n. 15 - Polo Tecnologico della Brianza)
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Porta Ticino Easy Stop SA
Via San Giorgio 37
CH-6877 Coldrerio
T. +41582119910
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