Can Italy Be Far Behind?

By: Ian Campbell | Fri, Apr 20, 2012
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What is going on in the Eurozone impacts, and will continue to some perhaps significant degree impact, everywhere else. Two recent articles, reported that on April 17 The International Monetary Fund released its 2012/2013 forecast for Italy. That forecast is reported as targeting:

Only about three months ago, shortly before Greece Sovereign Debt was restructured, I began to warn about Spain as the next Eurozone country to focus on. That has turned out to be 'all the news', and reports abound every day on Spain's:

Measured by GDP, Spain is the fourth largest Eurozone economy, the fifth largest European economy when the United Kingdom is considered, and the world's twelfth largest economy.

And so we come to Italy. Italy (IMF 2011 statistics from Wikipedia) is:

Neither article reports the current Italian unemployment rates, which in February 2012 is said to be 9.3%, with a youth unemployment rate of 31.9%.

The cited articles do not include commentary on the IMF's Eurozone and World Macro-economic assumptions that must underlie the IMF's 2012 and 2013 forecasts for Italy's economy. Perhaps importantly, the IMF is reported as having recently upgraded its World and U.S. 2012 economic growth targets from 3.3% to 3.5%, and from 1.8% to 2.1% - while maintaining a +8% 2012 economic growth rate for China.

Forecasting much of anything is extremely tenuous in the current world economic climate. This is true for forecasts are generated by the IMF, the U.S. Federal Reserve, the 'economist on the street', or anyone else. One has only to reflect on recent U.S. Federal Reserve forecasts for confirmation.

Accordingly, given ongoing world economic uncertainty and volatility, I suggest you begin to pay very careful attention to Italy going forward, but do so without losing sight of what is transpiring in Spain.

 


Italy to Miss Budget Deficit Targets, Debt to Rise: IMF
Source: CNBC, (from Reuters), April 17, 2012
Reading time: 3 minutes, thinking time longer

As We Assured Clients Two Years Ago, Italy's Riding the Broken Promise Express To Restructuring
Source: BoomBustBlog, Reggie Middleton, April 17, 2012
Reading time: 4 minutes

Italy's Jobless Rate Increases to Highest Since 2001
Source: Bloomberg, Chiara Vasarri and Lornzo Totaro, April 2, 2012
Reading time: 3 minutes

Gold needs to re-establish safe have appeal in the short term
Content includes: IMF growth forecasts
Source: Commodity Online, April 18, 2012
Reading time: 4 minutes

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
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Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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