On the other hand, the forecasts are less reliable than usual, due to the “unprecedented shock that is affecting the Italian economy”. They are mainly based on “assumptions that mainly concern the extent of the fall in production in the second quarter of 2020, more marked than that of the first, and the speed of recovery of production rates in the third and fourth quarters”. Provided, however, that there is no “significant recovery of the contagions in the second half of the year”, and that the economic measures have the expected positive effect, also favored by the “continuation of an accommodative monetary policy that stabilizes the financial markets by guaranteeing the normal credit operation. “The labor market is suffering from the consequences of the lockdown not only due to the loss of jobs, but also due to the huge increase in inactive workers, around half a million in the first four months of this year. A situation that weighs heavily on women: the female inactivity rate increased by 2.3 percentage points while unemployment decreased by 2.6 percentage points. The increase in inactivity was more pronounced between the age group 35-49 (+ 10.4%, 278 thousand units) and 25-34 years (+ 8.8%, 172 thousand units). Even the youngest are suffering, the 15-24 age group lost 119 thousand units, 31.8%.
Closely linked to the worsening conditions of the labor market and production activity, only partially attenuated by government measures, also household consumption, which this year will drop by 8.7%, while next year it should grow by 5.0%. The strongest contraction in purchases was recorded for durable goods and services, more accentuated in Italy (-17.5% and -9.2% respectively) and in Italy it is also more pronounced than in other countries. Non-durable consumer goods, on the other hand, showed a substantial stability, marking an increase in Germany (+ 0.7%) and contained reductions in Italy (-0.9%) and France (-1.1%).
In Italy, the latest data on retail sales refer to April, the month characterized by the presence of lockdown more incisive, they signal a marked decrease in volume compared to the previous month (-11.4%), a synthesis of a strongly differentiated trend between the sales of non-food goods (-24.5%) and those of food goods (-0, 4%). Among non-food products, the most marked contraction was marked by footwear, furniture, textiles, furnishings and clothing and fur. In the same month, the increase in e-commerce continued (+ 27.1% the value of sales compared to April 2019). The recovery will not be immediate: the most recent data on consumer sentiment for May 2020 confirm a picture of difficulties. Compared to March, the decrease is large for the economic and current climate, while the personal and future climates record smaller decreases. In addition, expectations on Italy’s economic situation marked an improvement while remaining at very low levels.
For exports, the collapse is double-digit, due to the “drastic downsizing of world trade”. Exports are expected to decrease by 13.9% in 2020 and then increase by 7.9% in 2021. Not only exports are going down, however: the slowdown in economic activity and the drop in purchases observed in the first part of the year they should also lead to a decrease in imports of 14.4% in 2020, followed by an increase of 7.8% in 2021.