News Analysis: Italian economy expectations various amid uncertainties worldwide

Although still marked by a deep recession and the European sovereign debt crisis, Italy, the eurozone's third largest economy, was expected to confirm a slow path of growth this year. Experts and businessmen of Italy's key producing sectors already gave a cautious mood on Italian economic perspectives in 2017 because of some uncertainties looming on a global level.

The mild positive sentiment nurtured among business circles was upheld by the latest economic data and forecast. The country's gross domestic product (GDP) grew by 0.9 percent in 2016, ISTAT, Italy's statistical office, said in its preliminary estimates on Tuesday. The figure exceeded the prudent 0.8 percent forecast posted by the Italian government last year.

The European Commission, the executive arm of the European Union, also revised up its forecasts on Monday, predicting Italy's GDP grew by 0.9 percent in 2016 (from a previous 0.7 percent), and would rise by 0.9 percent in 2017, and 1.1 percent in 2018.

ISTAT also stated Italy's industrial output in December 2016 increased by 1.4 percent on a monthly basis, and by 6.6 percent compared with December 2015, which marked the highest increase since August 2011.

December's results brought Italy's overall industrial production growth to 1.6 percent in 2016. Despite encouraging signs, however, the figures still leave Italy at the lowest level of growth among EU partners.

However, according to some officials, chances for a more robust growth were put at risk by global uncertainties, which would weigh especially on one of Italy's most crucial pillar: exports.

The wave of nationalism, or populism, at a global level, and starting from the United States, was a major cause for concern among Italian companies, according to the head of Milan-based Italian Foreign Trade Association (AICE).

"We have no idea whether free trade is going to be subjected to limitations, and this uncertainty will surely impact Italian exports," AICE president Claudio Rotti told Xinhua.

Italian exports rose by 0.7 percent in the first 11 months of 2016, and the country kept its rank as the world's eighth largest exporter, according to the Ministry for Economic Development.

"Exports kept more or less the same levels last year, with a rise in South East Asia, the Middle East -- the Gulf countries especially -- Mexico and Argentina in South America, and a sharp fall in Russia due to the embargo," Rotti said. Exports to China kept going well, with an increase in equipment "thanks to China's ongoing strong development process," he added.

"An increasing number of Italian firms, whose turnover is traditionally domestic-oriented, are now gearing up to find spaces in international markets, and they would definitely have the necessary energies," Rotti said.

Yet, the rise of protectionism would make optimism, for the time being, a hazard. "The kind of recovery all of us (in Italy) have so strongly waited for remains a question mark."

However, confidence was quite palpable in Italy's economic capital Milan, where business circles appeared in a better mood compared with other large cities in Italy.

"The overall sentiment among our associates is optimistic this year," Andrea Ardizzone, head of Italy's association of Information and Communication Technology (ICT) companies ASSINTEL-Confcommercio, said in an interview.

At the end of 2016, ASSINTEL forecast a 3.1-percent growth in the sector, and a total ICT expenditure of 25.47 billion euros (27 billion U.S. dollars).

"That growth was modest, yet very important, since it came after a seven-year-long negative trend," Ardizzone said. "Again, it is a relevant signal especially because it confirms the upward path," he said.

It is expected to expand further given its strategic relevance, and a key signal in this direction was provided by the growth in ICT spending in 2016.

"If we put into a diagram all of Italy's market sectors, with their corresponding ICT spending, we see all of them are again variously above zero...finance, banks, central administration, trade, small and medium firms, and large companies," Ardizzone said, adding "the local administrations were the only exception: their ICT investments remained below zero."

In a sector even more crucial for Italy's economy, the fashion and apparel industry, expectations seemed also favorable, although less straight. "The sector is moving at a variable speed," said Massimo Torti, secretary general of Italian Fashion Federation (Federmoda) representing some 35,000 retailers and stores.

Both multi brand and single brand retailers fall under the Federmoda's umbrella, and their perspectives would differ.

"The single brands seem very confident: they expect a consistent growth in 2017, also on international markets," Torti said.

The optimism partly relied on the fact that "Made in Italy" top fashion groups were able to influence global clothing consumption, according to Torti.

Multi brand retailers would face less bright perspectives, however. "They mostly count on domestic market, which has suffered from a strong crisis in private consumption since 2009, and has not entirely recovered yet," Torti said. Endit