Luigi Federico Signorini: Preliminary hearing on the budgetary provisions for the three years 2019-2021

Testimony of Mr Luigi Federico Signorini, Deputy Governor of the Bank of Italy, at the Joint Session of the Fifth Committees of the Chamber of Deputies (Budget, Treasury and Planning) and of the Senate of the Republic (Economic Planning and Budget), Chamber of Deputies, Rome, 9 November 2018.

Central bank speech  | 
23 November 2018

Mr President, Honourable Members of Parliament,

I wish to thank you for giving the Bank of Italy this opportunity to provide its technical assessment as part of the consultations on the budgetary provisions.

I will make only a brief reference to the general economic situation, which I described in detail before these committees a month ago.

The information that has become available in recent weeks confirms the signs that the economy is weakening. According to the provisional estimate released by Istat, GDP stagnated in the third quarter. Our latest assessments are that industrial production was basically stationary in September and may have diminished in October. The Purchasing Managers' Index for that month has fallen below the threshold compatible with an expansion of production, both in manufacturing and in services. More positive signals are coming from the demand side: consumer confidence showed an improvement in October, returning to the same level as at the end of last year; according to monthly data on foreign trade, goods exports to EU countries increased in the summer. Financial market volatility has sharpened and risk premia remain high.