Key Highlights on Italian Economy

Transcription

1 Key Highlights on Italian Economy Incontro con l Ambasciatore Reinhard Schäfers e il prof. Roland Berger Franco Bassanini 25 Marzo 2014 Cassa depositi e prestiti

2 Italian economy / Key highlights GDP is expected to decline by 1.7% in 2013 BUT recession ended in Q and GDP is forecasted to grow by 1% in Italy has high public debt (132% of GDP) BUT: budget balance is better than those of most peer countries, while primary balance is the best among major advanced economies; private sector has low leverage. Total leverage of the economy is lower than in France, UK and US. Furthermore approx. 60% of public debt is held by domestic households. Italy has not been in a need to provide significant Government or central bank support to the financial system as in some of the peer countries. Real estate has not experienced major bubbles. Italy is a strong exporting country Italian equity valuations are significantly lower than in peer countries 2

3 High Government debt, but low private sector debt Government debt (2013, % of GDP) Government and private sector debt (% of GDP) Germany Canada Italy France US Australia UK Spain Japan Ireland Germany Canada Italy France US Australia UK Spain Japan Ireland G.vt debt Private sector debt Considering private sector Italy is one of the less levered economies Source: IMF Fiscal Monitor (October 2013), IMF 3

4 Most government debt is held by Italians Breakdown of holders of Italian public debt (%) Private sector leverage (% of GDP) [NOME CATEGORIA] 3.6% [NOME CATEGORIA] 3.8% [NOME CATEGORIA] 13.9% [NOME CATEGORIA] 26.2% Italian households 12.8% [NOME CATEGORIA] 39.7% More than 60% of Italian public debt is held by Italians. Among the lowest levered developed economies Source: Bank of Italy (2012), IMF 4

5 Highest primary balance among major advanced economies Government budget balance and primary balance (2013E, % of GDP) Government primary balance (% of GDP) 6 Italy (0.4) 1.7 Budget Balance Primary Balance Germany France UK US (4.0) (2.0) (4.7) (6.1) (3.2) (5.8) (3.6) Germany France UK Italy US Recent structural reforms (pension system and spending review) expected to produce significant primary balance improvement in future years Source: IMF Fiscal Monitor (October 2013) 5

6 Fiscal tightening and pensions system reforms in past years Year-on-year change in fiscal tightening, % of GDP (2013) Change in gross public pension expenditure (in % of GDP) Source: Thomson Reuters, Credit Suisse Research, European Commission 6

7 Relatively sound financial system Government and central banks support to the financial sector (% of GDP) Ireland Iceland Greece UK Germany Belgium Netherlands Spain Austria Denmark France Italy Recapitalizations (1) Asset purchases and guarantees (2) (1) Recapitalizations and other restructuring costs, excluding liquidity support (2) Asset purchases and guarantees funded by Treasury and central bank Source: IMF Economic Review

8 Relatively stable real estate sector Residential property price index (31/12/2000 = 100) No major real estate bubble Source: OECD 8

9 Italy is a strong exporting country * Excluding Argentina, South Africa, Saudi Arabia and Australia Source: Eurostat, European Commission, CSC Confindustria, WTO 9

10 Stock exchange valuation multiples are close to 15 years low P/E FTSE MIB EV/LTM EBITDA FTSE MIB 30x 10x 25x 20x 15x x 8x 6x -0.3 x 10x 5x 4x Dec-98 Jun-01 Dec-03 Jun-06 Dec-08 Jun-11 Dec-13 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 Fonte: Factset 10

11 Stock exchange valuations lower than peer countries Italian equities P/B, relative to Continental Europe 12m fwd. P/E: Italy relative to EU ex. UK Fonte: Thomson Reuters, Credit Suisse Research 11