The economy presents itself at the start of 2022 in “great shape” but the countries will have to face “the odyssey in real challenges” (energy and digital transition, demographic decline, multipolar world) orphans of the most expansive policies that, during the its millennial history, humanity has ever fielded in times of peace. This is the analysis of Fabrizio Galimberti and Luca Paolazzi, who on Firstonline draw the picture of the situation and try to imagine what will happen in the coming months.
According to the two economists, Italy is forging ahead with the closure of the economic activity hole caused by the pandemic: this will happen already in the current quarter, synchronously with Germany, slightly behind France but a year before Spain. “This is undoubtedly due to the government’s hyper-expansive policy which has left Italian companies free to express their ability to serve foreign (increase in quotas) and internal markets”. () Ing
Paolazzi and Galimberti risk a prophecy: “This year of grace of 2022 will be the last of the pandemic, which will become a creeping endemic disease, a bit like the flu or chickenpox. And the economic recovery will continue without serious scratches“.
The prediction is essentially based on the fact that, “in this challenge to the last antibody between Sars-CoV-19 and modern medicine, the latter will win. Antibodies from vaccines, with an assist from the antibodies of the post-Omicron healers, they will circumscribe the pandemic and the virus, with the greater part of the population now immune, will no longer find room to spread “. However, since the danger of new variants remains, it is absolutely necessary to help poor countries to get vaccinated: “it is not an act of charity, it is an indispensable measure to protect us and them”. In the meantime, however, the Omicron has shown slight consequences on economic activity.
On the inflation front, “the moment of truth has arrived”, the two experts argue, and “from now on, the dynamics of prices will begin to decline”. As for wage dynamics, what matters – they say – is the ULC (labor cost per unit of product) which “is not registering a red alert trend”. “In addition, the annual comparison already leads to a weakening of the impact of the rise in commodity prices on the dynamics (not on the level) of prices from the current month. Finally, the underlying forces exert a discrete downward pressure on the lists. Competition is accentuated by the digital revolution.
And the erosion of purchasing power due to the upside in prices over the past year is causing many manufacturers to offer discounts as a form of marketing. From the series: the inflationary mentality does not live here “. To the” Cassandras who fear, for Italy, the close imminent venture of the ECB, the closing of the Qe umbrella, and the reaction of the markets that realize that Italy has a high public debt “Paolazzi and Galimberti reply:”Don’t worry: real rates will stay below the economy’s growth rate and debt will continue to be sustainable“.