"While we are all waiting for the updated forecasts that the government will put on the basis of the DEF in a few days, Confindustria has been working on its own serious contribution on the analysis of the serious problems we face. With the Russian invasion of Ukraine further aggravating all the price tensions, the scarcity of raw materials and production inputs, and the bottlenecks in global trade that were already powerfully at work before the conflict, making forecasts in these circumstances is very difficult. The absolute uncertainty of how much longer the war can last, when and how a shared framework between Moscow and Kyiv will be possible for the ceasefire first and then for the evolution into a real peace agreement, whose compliance is also guaranteed by other countries: on all this will depend the intensity and solidity of the cooling of the economic consequences that are now before us'. Thus the President of Confindustria, Carlo Bonomi, during the press conference at the end of the presentation of the Centro Studi Confindustria forecast report. 

"It will not be a short process, and making economic forecasts today means having to be explicit and clear in the contextual assumptions to be fed into the forecasting model. For this reason,' said Bonomi, 'the Centro Studi Report has been drawn up on the basis of three different hypotheses: one that appears to be the best possible and desirable today, one that is intermediate, and finally a third hypothesis that is decidedly adverse. Depending on whether the weapons go silent with an initial handover to diplomacy within three months, or whether a real ceasefire does not take place until the end of the year, or even later. The numbers that can be deduced, however, are frightening and are such as to give extreme and further concreteness to the growing and unheeded alarm that Confindustria has been sounding for months'.

In the latter part of 2021, industrial production had started to decline rapidly. Since December it had moved into negative territory. According to the President, 'today, even in the most optimistic scenario of the three indicated, the consequence is that we will have 2022 GDP growth below 2% (1.9%) and no longer above 4% as expected, and 1.6% in 2023. That is, below only the carry-over effect on 2022 of the strong rebound of the previous year, with a technical recession in the first 2 quarters of the year not offset by a return to growth in the second half of 2022. In the second scenario, 2022 growth would fall further to 1.6%, and to 1% in 2023. In the most severe scenario, we would be in full recession in 2023'.

This is why Bonomi emphasised at the press meeting that 'even in the best case scenario, industrial production would fall this year from +11.7% in 2021 to +1.5%, if and only if things improve in the second half of 2022. Gross fixed capital formation, after the encouraging +17% in 2021, would only increase by +4.5% this year. Hitting the propensity to invest of companies precisely in this 2022, which is crucial for the realisation of the GFCP'.

"These are scenarios and numbers that should constitute a very serious general alarm for the institutions and politics of our country," the leader of the industrialists emphatically pointed out.

"The attempt, throughout 2021, in the face of our growing reminders of the enormous risks of the steep rise in energy and mining and agricultural commodity prices, has been to repeat that cost increases and production supply difficulties were ephemeral and temporal phenomena. 'In many ways,' Bonomi said, 'we see a similar tendency around us today: to believe that maybe in a few weeks the conflict in Ukraine will end and everything will go back to pre-COVID 2019. That was not true last year, it is not true in this 2022'.

The President, therefore, stated that we cannot waste any more time: 'the time has come to abandon these risky illusions and take structural and appropriate measures. In four lines of action'.

Attached, the trace of the full speech by the President of Confindustria, Carlo Bonomi.

Here the link to the Rcontribution of the CSC "The Italian economy to the test of the conflict in Ukraine' https://www.confindustria.it/home/centro-studi/temi-di-ricerca/congiuntura-e-previsioni/tutti/dettaglio/rapporto-previsione-economia-italiana-primavera-2022

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