#SoseXpress - Press Review 6/12 February 2021

The Recovery Fund represents a unique opportunity for Italy to change the course of its economy, making it stronger and suitable for the future. 

Valdis Dombrovskis – Vice President of the European Commission. 

The Debate of Ideas 

 

Revitalizing an anemic Europe (and Italy), the latest paper by Luigi Paganetto 

In his latest paper, the President of Tor Vergata Economics Foundation takes inspiration from the project "Revitalizing Anaemic Europe." The Foundation realized the report in collaboration with 20 scholars and experts, bringing together reflections and proposals useful to relaunch European Governance during the Italian Presidency of the EU. Facing the unexpected but decisive challenge of the Covid-19 crisis, the defense of health, and the fight against the economic recession, the European Union, has the opportunity to show its capabilities and revitalize itself, leaving its " anemic" status. The author reminds us that we have to overcome the pandemic and other global challenges such as the demographic and migrant crisis, the consequences of globalization, climate change, and environmental requirements. 

CNR, the use of mathematical models to balance the costs of the pandemic 

To optimize the containment measures by keeping health and economic costs under control through mathematical models is the focus of a joint study by IASI (Institute for Systems Analysis and Computer Science) of Cnr and the University of Milan-Bicocca published in “Annual Reviews in Control.” The researchers developed a technique to reduce the deaths caused by the spread of the virus and the socio-economic impact of measures to contain the pandemic. 

Studies, research, and numbers 

 

The Italian economy in brief: the monthly update of the Bank of Italy 

The document proposes tables and indicators with economic information on real and credit indicators, statistics on external relations and public finance, forecasts on inflation and growth. 

The Bank of Italy: the international tourist flows decreased by 60%  

The survey on international tourism by the Bank of Italy recorded a severe contraction in tourist flows in November 2020, both inbound and outbound, confirming the trend in the previous two months. 

Compared to November 2019, foreign travelers' expenses in Italy are 81.6% lower, Italian travelers' abroad 82.6%. In particular, in September, October, and November, foreign travelers' expenditure in Italy decreased by 60.8 percent compared to the same period of the previous year. 

  

EU economic forecast: Italian GDP fell by -8.8% in 2020, but it is projected to expand by 3.4% in 2021

According to EU estimates, Italy's GDP fell by 8.8%, less than in autumn 2020, and will grow (more slowly than expected) by 3.4% in 2021. The European Commission released the new estimates showing an increase compared to the previous forecasts in July 2020, recording a drop for the Italian economy of 11.2%, then revised to 9.9% in the last autumn. 

In summary, the European Commission has forecast a smaller reduction in 2020, lower growth in 2021, and a stronger growth in 2022.  

  

Istat: in 2020 industrial production at -11.4% in the year 

2020 closes with an 11.4% decrease in industrial production compared to the previous year: the second-worst result since the beginning of the historical series (starting from 1990), after the fall recorded in 2009. According to ISTAT estimates, the decline involves all the main industrial sectors and, in the case of consumer goods, is the worst ever recorded. 

The most significant reductions concern the textile, wearing apparel, leather, and accessories industries (-28.5%), the manufacture of coke and refined petroleum products (-16.5%), and the manufacture of basic pharmaceutical products and preparations (-10, 9%).

Unioncamere: Covid stopped the growth of women's businesses

The pandemic has curbed female entrepreneurs' growth: at the end of 2020, they were 4 thousand fewer than in 2019, equal to -0.29%, mainly affecting the under 35s. 

The Osservatorio dell'imprenditorialità femminile  (Women's Entrepreneurship Observatory) of Unioncamere and InfoCamere specifies that the reduction concerns above all the Center North (the South marks a +0.26). There are a total of 1.336 thousand women-led enterprises. Their weight on the total national production system also decreased, albeit slightly: now it is equal to 21.98%, compared to 22% in 2019. 

CRIBIS: Covid increases the delay in payments by companies

According to the CRIBIS Payments Study, updated to the second quarter of 2020, the most severe delays (over 30 days) increased by 11.3% compared to the previous quarter, returning to the levels of one year ago. Calabria joins Sicily among the least virtuous regions (21.8%). 

The negative economic repercussions of the Covid emergency on the punctuality of payments began to emerge on 30 June 2020: companies that paid suppliers with severe delay (over 30 days) increased to 11.8%, compared to the first quarter of 2020 (10.6%) and returned substantially to one year ago (11.6%). 

110% Superbonus, 340 million tax credits booked in January

In January, the numbers concerning the 110% Superbonus practically doubled, confirming a growing trend: over 3,100 interventions for approximately 340 million tax credit, with construction sites scattered throughout Italy". The Minister of Economic Development, Stefano Patuanelli, wrote on Facebook.

Coldiretti, floriculture lost 1.7 billion but holds out thanks to exports 

Spending on plants and garden care holds out but the horticultural sector recorded a loss of 1.7 billion in the last year due to the Covid emergency. The decline in turnover for some companies reached peaks of 40%. Companies resisted thanks to exports. 
According to Coldiretti, Italy sold flowers abroad for 777 million euro, only 2.7% less than the previous year.

EY: 70% of companies have a sustainability plan 

From a study carried out by Ernst & Young, “Seize the change: sustainable futures,” presented by EY during the Sustainability Summit, an increasingly green future emerges for companies, and 70% of them have elaborated a sustainability plan. The Ey research, carried out on a sample of over 260 Italian companies in different sectors (62 interviewed and 201 analyzed on non-financial statements), revealed that companies are reconsidering their strategies in terms of sustainability in a period of intense and accelerated transformation due to the Covid emergency.

Prometeia-Intesa Sanpaolo: Manufacturing industry at -10.2% in 2020 

In 2020 the Italian manufacturing industry closed with a decrease in turnover of 10.2%, equal to 132 billion euro less than in 2019. These estimates emerge in the report Industrial Sector Analysis - February 2021 by Prometeia in collaboration with Intesa Sanpaolo. 

The contraction, less severe than the 2009 crisis (-18.8%), affects all the major Eurozone countries: in the first eleven months of 2020, the industrial production index recorded a drop of -13 % in Italy and France, -10.8% in Germany and -10.5% in Spain averagely.

The Voice of Stakeholders 

CNA Lombardia: GDP -9.8%, consumption -11%. Possible recovery after summer

The most recent data processed by the Economics and Territory Observatory of CNA Lombardia show a severe fall in the main economic indicators: GDP -9.8%, consumption -11.1%, and investments -8.2%. With almost 2.3 million SMEs, Northern Italy represents 50% of small and medium enterprises in the national territory.  The latest projections outline a gloomier economic picture than previous estimates.

  

Confcommercio: Covid halved passenger traffic  

According to a study by the Osservatorio Congiunturale Trasporti (Confcommercio Research Department in collaboration with Conftrasporto), in 2020, restrictions on mobility and production activities caused a collapse in passenger mobility by almost 50%, with traffic decreasing by 32.2% in motorway transport, 41.7% in rail transport, and approximately 73% in air and sea transport. The negative trend in freight transport was more contained but still significant. In 2020, it recorded an overall decrease of 18.7%, with peaks in road transport (-25.8%) and air transport ( -23.6%). 

 

Confartigianato: a loss of 112.3 billion in the manufacturing industry due to Covid

In the first eleven months of 2020, manufacturing revenues suffered a decrease of 112.3 billion euro, equal to a 12.3% loss, and a decrease of 48 billion euro in exports. Fashion experienced the heaviest losses in turnover, with textiles down by 16.7%, apparel by 20.3%, and leather goods by 25.9%. 

A study by Confartigianato highlights how Italy is the European leader regarding small manufacturing companies with 1 million 922 thousand employees in 368 thousand companies with less than 50 employees.

Section 4 - Innovation 

 

Safer Internet Day 2021: Italy earned 2 points compared to the latest data 

During the Safer Internet day, last February 9th Microsoft released the Digital Civility Index. Microsoft research analyzes the attitudes and perceptions of adolescents (13-17) and adults (18-74) concerning digital civic education and online safety in 32 countries, including Italy. Italy ranks 12th out of 32 for exposure to online risks, improving by 2 points compared to last year. However, adolescents are the most exposed to the dangers of the network, especially during the lockdown. 

Local Authorities 

 

Municipal default: AI to predict the financial difficulties of local authorities

To prevent local authorities' financial difficulties through artificial intelligence integrated with the huge amount of data available. A recent study (Predicting bankruptcy of local government: A machine learning approach) shows that the integration between open data and artificial intelligence can predict local authorities' failures with very high precision. This was possible by monitoring 7795 Italian municipalities in the period 2009-2016. The study shows that it is possible to make predictions of bankruptcy with a high true positive rate and low false-positive rate. 

 The World of MEF  

 

G20: the leaders of the independent panel prepare the global pandemic response

On February 10, the High-Level Independent Panel, established by G20 Members last January 26, met to discuss a financing system for the global commons for pandemic prevention, preparedness, and response.  Introducing this meeting, Minister Gualtieri reiterated its importance for future economic and health policy strategies. The table will elaborate practical recommendations to manage the pandemic crisis by collaborating with International Financial Institutions.

Aggregations of SMEs: the support measures of the budget law 

The 2021 budget law includes tax measures incentivizing business combination processes through company mergers or transfers.  These measures aim to support a creative and dynamic fabric affected by problems related to capital, often below the legal limits, especially in the post-pandemic period. 

Self-employed: the MEF Observatory publishes the 2020 data 

464,700 new VAT numbers were registered in 2020, mainly in commerce (about 20% of the total) followed by professional activities (16.3%) and agriculture (10.8%). Compared to the previous year, there was a significant decrease (-14.8%) due to the ongoing health emergency. 

Regarding their business structure, 72.2% of VAT numbers were registered by individuals, 21% by corporations, and only 3.4% by partnerships.