Italian Economic Growth Possible in Second Quarter, Lobby Says

(Bloomberg) --

Italy’s business lobby sees a higher chance of a return to economic growth in the second quarter of 2021 as a consequence of the rally in financial markets since Mario Draghi took the reins as prime minister.

The rebound in markets may boost confidence among households and businesses, and improve the economic outlook for 2021, Confindustria wrote in a report published on Saturday.

Draghi’s Italy Receives Record $134 Billion Orders in Bond Sale

Italy racked up more than 110 billion euros ($133 billion) of demand for its first bond sale since former European Central Bank head Draghi took office last week, a ringing investor endorsement for his new government. Italian bond yields tumbled to record lows the week before on signs that the new premier would lead a government with near-unanimous support, while the FTSE MIB index has gained about 6% since Feb. 1.

Still, Confindustria doesn’t expect a rebound in Italy’s gross domestic product until the third quarter of the year, with no potential for recovery in the first quarter as ongoing Covid-19 restrictions and delays in the vaccination campaign hold back the country’s economic activity.

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