Tuesday , 21 May 2024

Campbell Asks: Can Italy Be Far Behind Spain?

About three months ago, shortly before Greece’s sovereign debt was restructured, I began to warn about Spain as the next Eurozone country to focus on. That has, indeed, turned out to be ‘all the news’ with reports every day on Spain’s deteriorating financial condition. Given the ongoing world economic uncertainty and volatility, however, I suggest you now begin to pay very careful attention to Italy going forward, but doing so without losing sight of what is transpiring in Spain. [Let me explain why I see ‘Italy’ eventually surpassing Spain as ‘all the news’.] Words: 485

So says Ian R. Campbell (www.StockResearchPortal.com) in edited excerpts from his synopsis and review (a component of a subscription service but presented here with his kind permission for posting on www.munKNEE.com (Your Key to Making Money!) of 3 articles* on the subject. This paragraph must be included in any article re-posting to avoid copyright infringement.

Campbell goes on to say, in part:

My Synopsis 

The International Monetary Fund released its 2012/2013 forecast for Italy, as reported in the first two articles referenced below, targeting:

  • Italy’s deficit as a % of output at 2.4%  in 2012 and 1.5% in 2013 as contrasted with the Italian Government’s current forecasts of 1.6% in 2012 and a balanced budget in 2013;
  • Italy’s public debt (said to be 2nd highest to Greece in the Eurozone) at 123.4% in 2012, and 123.8% in 2013;
  • Italy’s economy to shrink by 1.8% in 2012, and by a further 0.3% in 2013;
  • Italy’s ‘primary balance’ (the budget balance excluding debt service costs) at +3% and +4% of GDP in 2012 and 2013 respectively, as contrasted to higher recent Italian Government targets of 3.4% and 4.9% respectively; and,
  • Italy’s ‘tax burden’ (fiscal revenues expressed as a % of GDP) at 48.3% and 49.0% of GDP in 2012 and 2013 respectively, as contrasted to lower the recent Italian Government target of 43.8% in both years.

My Comments

Spain: 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 with
  • an unemployment rate of around 23% and youth unemployment rate around 51%….
  • [Read: Spain is an Absolute Disaster! Here’s Why]

Italy: According to IMF 2011 statistics from Wikipedia, Italy is:

  • the third largest Eurozone economy, with only Germany and France being larger;
  • the fourth largest European economy when the United Kingdom is considered;
  • the world’s eighth largest economy; and,
  • measured by GDP, boasts an economy that measured by GDP is about 50% larger than Spain’s with
  • an unemployment rate of 9.3%, with a youth unemployment rate of 31.9%….

The above statistics compare most unfavourably with the IMF World and U.S. 2012 economic growth targets which they recently upgraded from 3.3% to 3.5%, and from 1.8% to 2.1%, respectively,  while maintaining a +8% 2012 economic growth rate for China….


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

 *Referenced Articles:

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Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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