Italy To Miss GDP Forecast, Sees Sub 1% GDP Growth

Tyler Durden's picture

It is only a matter of time before France announces to little fanfare that its GDP is about to be slashed, and that as a result the rating agencies put it on downgrade review, and blowing up the entire EFSF mechanism. But before that one needs to shake out the weaker hands, like Italy. For better or worse, that just happened. From Reuters: "Italian economic growth is likely to fall short of the government's official forecast of 1.1 percent in 2011 and 1.3 percent in 2012, probably coming in under 1 percent, a senior government source said on Monday. "It will be very difficult for Italy to reach 1.1 percent growth this year and next," the official, who spoke on condition of anonymity, told Reuters." So if the raters needed any excuse to go ahead and downgrade Italy even more, this is it. As for France: we give them a few months before they also have to tell the truth, and face the music, although with French CDS once again trading at all time wides, the market is not waiting.


Both the Bank of Italy and the International Monetary Fund are expecting growth below 1 percent this year and even weaker growth next year.


Bank of Italy deputy director general Ignazio Visco said last week that the 45.5 billion euro fiscal package currently going through parliament would probably squeeze growth but there was no alternative to tough austerity measures.


The government is expected to issue updated growth forecasts as part of updated budget estimates around Sept. 20.

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ISEEIT's picture

Bear feeding time.

Kuri's picture

Gold ? 7200 $ ? No ! it has to be : 20K +++ !!! Stop with paper shit : let's go physical !!!!!

unky's picture

I would rather say sub zero, but more important they have bunga gunga parties for the president to boost GDP

snowball777's picture

Really putting the gross in GDP.

urbanelf's picture

Mama mia!  That's-a one spicy-a meatball!

Sudden Debt's picture

Like a good prosciutto, THEY HANG ON A HOOK AND ARE LEFT TO DRY!!!

Gandalf6900's picture

Working for one of the biggest italian isurers I can tell you with utmost certainty that unless some pressure is taken off italian bonds the whole system is going to crumble in the next 6 months

Coldcall's picture

you give it 6 months? I reckon we have a few weeks at most, with Italian yields rising parabolically today i think that might be a consrvative estimate.

Gandalf6900's picture

as soon as bunga bunga releases his new ( but completely usless) budget plan the markets will recover, ECB will keep buying are bllody bonds and the can will be kicked down the road, did anyone notice that there are several key occurrances on and around September 20th

Oh regional Indian's picture

EU bonfire. Courtesy of their karmically devastating rape of the world for the better part of....2000 years?
But Italy is the sideshow. It's spain. It's all about spain.
Any idea how much Spanish debt is held by Italian banks? It's going to rain in Spain and when that happens, watch out below.

Close now, very close. I think my thesis is proving prescient and sadly on target.


sheeple2012's picture

Interesting... also heard the "Axis of Weasel" NY Post headline writer died a few days ago at age 43.... karma bitches!

Global Hunter's picture

I can safely say that the material in your posts and blog was not covered in my high school or university courses.

LawsofPhysics's picture

No shit, heck they don't even cover the concept of "winners" and "losers" any more.

Oh regional Indian's picture

mine neither GH. I unlearnt a lot.


Ancona's picture

The grand European Union Experiment has gone terribly awry.

The architects of this Frankenunion forgot that the peripheral countries have very distinct personalities and cultures that are ingrained in their DNA. The Troika wants them to force austerity down the throats of the people, and at the same time force them in to deeper debt. this makes zero sense on planet Earth, but it appears to make perfect sense to them, in their private little alternative universe.

Greece and Italy are going to fall, and with them they take the rest of Europe, and quite likely, the U.S.

Time to put those big boy pants on again.

Gandalf6900's picture

just remember, debt is good for the ponzi schemers and until the inflation spurred from debt is sustainable to the poor sheeple this whole shananigan will continue, Greece and portugal might fall out but they will keep printing their way out of having to give up on the Euro, it will never stop til the people say it is time to stop

LawsofPhysics's picture

Good summary, but I would argue that you forgot one additional element.  As TPTB finally begin to realize that the "sustainable debt level" is much less than they expected and as more and more people simply throw their hands up in the air and say "fuck it", TPTB will quickly realize that they will need to cut their own ranks.  This is were ZH comes in, because if we can front run that volitility, you can profit.  These folks are greedy and as Gandi once said - "The earth has enough for man, but not enough for man's greed."

johngaltfla's picture

Time to eat.

FAZ biotches.

CrashisOptimistic's picture

Somewhat overdue for some overpaid EU official to sprint to a microphone and announce agreement to deal with the problem via additional funding for the EFSF.

He can manufacture it out of thin air.  Doesn't matter.   As long as he says it, the headline reading algos will pick it up.

LawsofPhysics's picture

Italy is no different than many I know.  Very hard to pay anything back when you don't actually have a job or have any customers willing to pay the additional cost associated with excess usury.  The debt is fraud, the usury is a fraud.  Let's get this jubilee over with already.

Tao 4 the Show's picture

If the dominoes start falling fast, the (idiotic) idea of Germany bailing out the mess becomes so obvious in it's stupidity that even the sleeping should be able to see through it. Looks like either monetization or break up coming soon. But even monetization has the problem that there is no long term solution at hand and if the Euro sinks too low, stress builds on the Swiss franc with attendent bank problems from eastern Europe, etc.

Looking a lot like checkmate, but I suppose they will pull a few more rabbits from the hat.

Sudden Debt's picture

SO CLOSE!!! yet so far....


markar's picture

The big question is what will China do in the midst of this Eurocollapse? Will they keep propping up the EUR? They have a lot at stake here.

LawsofPhysics's picture

Let them continue propping up the EUR.  Most don't realize that the U.S. and China are on the same page when it comes to Europe.

Poetic injustice's picture

Yes, ironically China and USA sends all funds to keep Europe afloat. Hahahaha.

Sudden Debt's picture

Maybe start selling their crappy papers and help out with the crash while it's got momentum?


english serf's picture

You can look at all the charts you like ,but listen up!.I am out there selling domestic garage doors in a very wealthy area close to London.Our enquireys are down two thirds,its all about price.No one spends now unless its absoloutly ness. Wages dropping and massive inflation,just had my energy supplier contact me, gas going up 18% and electricity by 11%

The uk is on a knife edge.What will tip it over? Maybe the massive winter about to hit europe

Max UK's picture

is that winter a 'what if,' or is it forecasted?

If it is a British Met Office forecast then ignore it. Their track record is beyond useless.

english serf's picture

The met office? Do me a favour! Visit exacta weather and laymans sunspot count

Max UK's picture

Thanks for the pointers; looks interesting!

MFL8240's picture

What was the US GDP like?  Mutiply the size of this economy to Italy's and it seems to me we have no room to talk.