Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most of countries across the world registering declines in their economic growth for the year to date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend was seen in Italy, as economic growth in the country dipped in the first quarter of 2020. The decline had an adverse impact on all sectors, including banking and wealth management. Italy - which was one of the worst-affected European countries - is now on a path to recovery with fewer positive cases being reported, businesses gradually restarting their operations, and domestic travel resuming thanks to the government’s stringent measures.

This report focuses on the impact of the Coronavirus outbreak on the Italian economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

- Italian retail savings and investments are forecast to stagnate in 2020 as the already battered economy has come to a standstill thanks to the impacts of COVID-19. Although the performance of the stock market started to revive in response to eased lockdown measures across the country, the fragile state of the economy coupled with the possible outbreak of a second wave of infections will continue to depress demand for risk assets throughout the year. Retail equity and mutual fund holdings are expected to take the brunt of the Italian economy’s slowdown, with respective declines of 22.6% and 16.4% anticipated.
- Retail deposits, and to a lesser extent bond holdings, are set to fare better than initially expected courtesy of a flight to safety away from risk assets as well as the government's measures to support the economy. However, given the extent of the pandemic in Italy, deposit holdings are expected to grow by a mere 7.1% while bond holdings are predicted to post a less severe decline of 3.3%, an improvement on the pre-COVID-19 forecast of -12.4%.
- Some segments of the Italian high-net-worth (HNW) market will be more affected than others due to their exposure to different industries. Those employed in the financial services industry will be hit particularly hard given the already substantial amount of bad debt that banks have been stockpiling. We also forecast COVID-19 to have a major impact on Italy’s retail, fashion, and luxury goods industry as factory closures, global supply chain interruptions, as well as a sharp decline in discretionary spending levels worldwide are taking their toll.
- Being more agile and less dependent on high-street spending, the tech sector is expected to hold up more robustly. However, it only accounts for 5.4% of HNW wealth, compared to 21.9% for financial services.
- The worst hit sectors have been hospitality and tourism, which suffered due to strict travel restrictions and a slump in demand among travelers globally. Meanwhile, with Italy being the leading manufacturer of global luxury goods, stoppages witnessed in the sector have put €63.4bn ($71.2bn) of the country’s exports at stake.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Italian retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the Italian retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in Italy, including deposits, mutual funds, equities, and bonds.