Italy’s Credit Impulse Doesn’t Bode Well for the Economy

To see how the turmoil in Italy is affecting the economy, the change in the stock of loans to households and non-financial corporations may provide more insight on the expansion of gross domestic product than the actual growth rate, according to Bloomberg Economics. The three-month average stood at minus 2.6 percentage points in April and Italy was already alone among the euro area’s four largest economies in making a negative contribution to the aggregate figure. Still, the latest number is far from the minus 10.4 percentage points registered in May 2012.

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