The one opened by the coronavirus is a scenario of “great uncertainty and the best thing we can do is outline some possible scenarios: in the basic one, with the continuation and maintenance of the current path of improvement of the contagion, in 2020 our estimate is of GDP at -9% and inflation at zero. In the more severe one, with the return of infections, the estimate is -13% and negative inflation. “He underlines, in an interview with Bloomberg TV, the governor of the Bank of Italy Ignazio Visco.
“Italy needs reforms,” said Visco, “but I don’t really think that the ECB’s purchases will stop this necessary process.” Reforms that “had to be launched for some time because they serve to increase growth while monetary policy cannot replace innovation and productivity”. On Italy’s possible use of the State Savings Fund, he said: “If there is need, I see no risks in using the European stability mechanism (Mes) but we should not consider it as a godsend”.
In the last few months, also for the outbreak of the pandemic, the governor of the Bank of Italy continues, “the level of participation in the labor market has dropped, so the unemployment rate does not say much: there are still signs of improvement, especially arriving from some regions. However, the figure still remains far below the 2019 data ». Visco recalls that “some jobs have been touched more than others, such as in tourism, in catering”. “There is an asymmetry,” he concludes, in Covid’s employment impact between different types of employment.