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Vignette Focus on Italy: macroeconomic and fixed income scenario

Focus on Italy: macroeconomic and fixed income scenario

If we wanted to characterise the contraction and recovery pattern, we would probably describe it as a ‘long U-shaped’ recovery; in other words, as a gradual normalisation which will take some time before seeing a return to pre-crisis levels. In Italy, the government is estimating an 8% GDP contraction this year, followed by a 4.7% YoY rebound in 2021. In our analysis, we consider two possible reference scenarios for 2020 growth: -8.0% YoY (as per the government scenario) and -12.0% YoY.

Global Investment View
03/04/2020 Research / Market

Global Investment Views - April 2020

Markets (financial cycle) are leading the economic cycle and will bottom out before the end of the coronavirus pandemic. However, they would stabilise once reassured on three points: The cyclical pattern of the pandemic, or when there is some sign of an improvement on the speed of the contagion. This depends on the ‘time’ variable (extension of the crisis period) and on the mobilisation efforts (containment measures introduced in different countries). There is still a lot of uncertainty at this point.