30th assiom forex congress economic developments and monetary policy in the euro area speech by the governor of the bank of italy fabio panetta genoa, 10 february 2024 1. global economic trends and outlook the global economy remains sluggish. world trade stagnated again in the fourth quarter of last year ; it is expected to recover moderately this year, but at a much slower pace than in the two decades before the pandemic. 1 the simultaneous tightening of monetary policy by the central banks of the leading economies is helping, along with the fall in energy prices, to bring inflation down significantly, but is dampening demand. the exception is the united states, where domestic demand and output continue to grow rapidly. the global outlook is also vulnerable to the uncertainty fuelled by the conflicts in ukraine and the middle east, as well as by the economic difficulties in china, where the property crisis continues unabated. disruptions to the red sea shipping route, which handles around 12 per cent of world trade, are forcing vessels from asia to seek alternative routes. this is delaying deliveries and increasing transport costs, especially for destinations in europe ( figure a1 ). in this weak economic context, geopolitical fragmentation is setting back economic integration between countries and regions across the globe. the introduction of trade restrictions, under way for some time, accelerated after the pandemic and the invasion of ukraine ( figure a2 ), 2 at times taking the form of embargoes on exports of technological products such as microprocessors. this could lead to a rebalancing of trade between countries, as has already occurred for energy products. if this new scenario were to endure, it would have significant medium - and long - term consequences. a decline in the international trade of goods, services, technologies and ideas would reduce productive efficiency and dampen the potential growth of the global world trade is estimated to have grown by 0. 6 per cent in 2023. this year, the anticipated trade growth rate is around 2. 5 per cent. according to global trade alert, countries have adopted more than 2, 000 protectionist measures since 2022 ; see also wto, reports on g20 trade and investment measures ( may - october 2023 ), december 2023. economy, which has been declining for years ( figure a3 ). indeed, global value chains are vulnerable to disruptions in the supply of key inputs and have become a source of uncertainty for macroeconomic developments. 3 barriers to capital

just over a week the single supervisory mechanism will become fully operational, and the immediate future poses challenges of the first order both for supervisors, involving the adaptation of our structures and functioning to the needs of the new european mechanism, and for banks. i would not like to conclude without thanking the whole team at the banco de espana, which has been working for months in collaboration with the european central bank, the banks and the audit firms to successfully see through this complex exercise. and, naturally, i would also like to extend my thanks to the teams at all of the banks which, for months, have devoted their best technical capabilities to this end. thank you very much for your interest and for being here today. bis central bankers ’ speeches