ignazio visco : 2021 world savings day address by mr ignazio visco, governor of the bank of italy, to the association of italian savings banks ( acri ), rome, 21 october 2021. * * * the way out of the pandemic the economic policies implemented since march of last year by the government, the eurosystem and the european union enabled italy to deploy sizeable resources to counter the very severe recession caused by the pandemic, and to do so without repercussions for the cost of borrowing, notwithstanding the limited fiscal space available on the eve of the crisis. in addition to strengthening the healthcare system, the measures focused above all on supporting household income and guaranteeing the necessary liquidity to firms. however, they were only partly able to mitigate the fall in consumption, investment and production, also owing to the restrictions on mobility introduced to curb infections. these trends were reflected in strong growth in the savings rate, although it was uneven and concentrated among the less severely affected households, while the public debt rose sharply in 2020, from 135 to 156 per cent of gdp. over the course of this year, with the successful rollout of the vaccination campaign and the continuing support of economic policies, production has recovered at a higher than expected pace. thanks also to the competitive capacity that italy has reclaimed in recent years, exports have benefited from the strong revival in world trade ; household consumption has been boosted by the progressive improvement in health conditions ; and firms ’ investment has displayed a more pronounced cyclical strengthening compared with the most recent recessions. in 2021, gdp is forecast to grow by around 6 per cent ; the debt - to - gdp ratio is expected to start decreasing as early as this year, marking a significant improvement compared with the forecasts made even just a few months ago. the outlook remains heavily dependent on the continued, substantial support of economic policies, which can now be more targeted than in the emergency phase and especially geared to stimulate the supply potential of the economy. these developments encourage cautious optimism regarding the speed of the exit from the crisis and point to a rapid return to pre - pandemic levels of activity, albeit with non - negligible sectoral and distributional differences. however, global risks are having an impact, especially those connected with the delays in vaccination campaigns in many emerging and developing countries. in addition, difficulties have emerged, including in the euro area, in the procurement of commodities and intermediate goods, in

. 3 in the euro area, the need for clear communication is heightened by the multilingual and multicultural environment. consistent interpretation of the ecb ’ s decisions by the various national audiences requires the establishment of common terms of reference and their adaptation to the specific national contexts. the national central banks play a key role. however, we should not conclude from this that we now have a common paradigm covering every aspect of central bank communication. in fact, no consensus has yet emerged among academics or central bankers on the ideal communication strategy. on the practice of publishing the projected path for interest rates, for instance, some studies cite the risk that the private sector could give too much weight to central bank information and accordingly under - invest in independent analysis of its own. 4 research at the bank of italy shows that when central banks release their projected path for interest rates, market participants understand well the information it contains. however, central banks seem to communicate effectively even when they disseminate qualitative information only. 5 the existence of different views should not come as a surprise, as the “ best practice ” is likely to depend in part on the institutional, cultural and economic environment, so that central banks are required to adopt different communication strategies. for example, so far only relatively small countries seem to follow the practice of communicating projected policy rates, possibly because their close dependence on external conditions may make it easier to convey the conditional nature of their projections. as lucas papademos pointed out recently, m. woodford, interest and prices, princeton university press, 2003. see j. d. morris and h. s. shin, “ social value of public information ”, 2002, the american economic review, and, on the empirical relevance of the argument, l. e. svensson, “ social value of public information is actually pro transparency ”, 2005, nber working paper 11537. g. ferrero and a. secchi, “ the announcement of future policy intentions ”, 2008, bank of italy, working paper series, forthcoming. there is no single recipe for every detail, 6 although good communication is now an essential component of any central bank ’ s toolkit. 7 2. central bank communication, inflation expectations and commodity prices the sweeping changes i have just described, and their lasting effect on the dynamics of inflation, must be taken into account in assessing policy at the current juncture, when, driven primarily by oil and food prices, inflation in the euro area is about 4 per cent, a