State of Italy’s Economy post COVID 19 Impact
Coronavirus disease, also known as COVID-19, was first identified in Wuhan, China, in late December 2019. China was the first country to experience the full force of the disease, with confirmed active cases at over 80,000 by end-March. European countries such as Italy, Spain, and France are currently in intense periods of the epidemic, trailed by the United States where the quantity of dynamic cases is developing quickly. In many developing economies and emerging market, the epidemic appears to be just beginning. The COVID-19 pandemic is expected to push the world into a recession. For 2020 it will be worse than the global financial crisis. The economic damage is expanding across all nations, following the sharp rise in new infections and containment measures set up by governments. Annual global GDP growth is projected to drop to 2.4% in 2020, which is already fragile by 2.9% in 2019, with growth possibly even being negative in the first quarter of 2020. Italy is impacting from the virus with the worst outbreak approximately 16,600 people have died. The Government has released Emergency funds in the face of an economic recession. Tourism is the big part of Italian economy, which is one of the hardest-hit sectors.
Real GDP Growth Projection before and after Covid-19 Outbreak, Selected country
Due to the coronavirus outbreak in February 2020, the GDP of Italy could not experience any growth in 2020. Value of 0.4 % points is lower than the OECD Economic Outlook of November 2019. According to the projection from March 2020, it is estimated that Italy's GDP will decrease due to the impact of coronavirus (COVID-19). Specifically, it is forecasted that the GDP of Italy would decrease by 3% by the end of the first quarter of 2020 and in the second quarter it could decrease by 5%. In addition, it is forecasted that textile, train and air transport, hotels, restaurants, shows, and sporting events sectors will record the biggest drop. Also, forecast from March 2020, due to the impact of the COVID-19 outbreak the unemployment rate in Italy could reach 11.2% in 2020 and then expected to decrease to 9.6% in 2021. Italy's unemployment rate almost reached 9.9% in 2019. Unemployment in Italy started increasing after the 2008 financial crisis and peaked at 12.7% in 2014. Due to coronavirus outbreak in 2020 had a negative impact on several industrial sectors in Italy. Particularly, it is estimated that the hotel and catering sector will encounter the largest decrease in terms of consumption value. As per Confindustria, Italian employers' federation and national chamber of commerce due to COVID impact about 60% of Italy's manufacturing industries closed in order to contain the pandemic. Confindustria additionally noticed that if the intense phase of the health emergency ends in May 2020 and production resumes gradually between the end of April and June and estimate that GDP in Italy will fall by 10% in the initial two quarters contrasted to the end of 2019. On average GDP will drop 6% to 2020. If emergency continues beyond May they have to revise forecast and said that national GDP will likely drop by further 0.75% for every additional week and production is at a standstill due to the coronavirus pandemic.
Impact on Italian Industries/Sectors due to COVID 19
Due to massive outbreak in Italy it has impacted a drop in the Italian industrial production and in the GDP of the country. However, some industries experiencing an increase in terms of revenue. The few industries are e-commerce, food retail, and medical appliances are among others that are forecasted to register higher growth in revenue.
Industries wise revenue growth in Italy in 2020, by scenario post Covid-19 Pandemic
According to the forecast in February 2020, it has been estimated that there will be a decrease in Italy’s GDP due to impact of global COVID outbreak. According to the projection textile, train and air transport, hotels, restaurants, shows, and sporting events sectors are expected to record the highest drop. On the other hand, some industries could benefit from the spread of coronavirus in terms of GDP growth. For instance, GDP could increase up to 6 % in the sectors such as food, health, chemicals for house care and personal care, food large-scale distribution, publishing activities, communication, and IT services.
Forecasted impact of coronavirus (COVID-19) on GDP in Italy Q1-Q2 2020, by industry
From research it has been clear that Italy is the country which is the hardest hit among EU member states in terms of confirmed COVID-19 cases. COVID-19 pandemic has a devastating impact on the Italian economy. Tourism is the big part of Italian economy, which is one of the hardest-hit sectors, roughly estimated that it is expected to decrease about 28.5 million tourist arrival in the country due to the impact of coronavirus.