Italy’s economy facing multiple threats; social peace at risk
The gas squeeze, higher interest rates and plummeting consumer confidence threaten to bring down Italy's economy on multiple fronts.
Just as the country was beginning to see the light at the end of the tunnel, after getting badly hurt during the pandemic, a combination of more unexpected shocks is threatening its stability.
The energy crunch due to the Ukraine crisis, the subsequent energy price spikes and rising interest rates are threatening to put Italy's economy on the ropes.
Confidence has diminished considerably in Italy with consumers and companies seeing a less positive future. Households are increasingly feeling the brunt of the inflation that has risen to nearly 7%, the highest level in over two decades.
Analysts are saying that Italy's economy could contract further if Russia, after reducing gas supply by 40 percent, decides to stop the flow of gas altogether.
A total halt in supply could trigger company shutdowns and layoffs. Numerous protests have been staged across the country over the past weeks amidst growing skepticism toward the government.
As the European Central Bank is expected to adopt higher interest rates to counter the eurozone's growing inflation, conditions of living are expected to worsen in Italy and across the old continent. Many fear this deteriorating scenario is likely to lead to a hot autumn of protests.