Our Credit Impulse indicator for Italy represents the flow of new credit from the private sector as a percentage of GDP. To calculate it, we use the variation of the stock of loans held by the non-financial private sector (Nonfinancial Corporations and Households & NPISH) on a quarterly basis and we calculate a second derivative which is finally expressed as percentage of GDP.
This indicator tends to lead the real economy by nine to 12 months and it constitutes a strong signal of reversal of the growth trend. It has recently experienced two peaks, in 2010 and in 2014, because of European Central Bank quantitative easing, higher inflows of liquidity in the economy and low oil prices, the euro exchange rate, and interest rates.
Since May 2017, it has evolved into negative territory, reaching its lowest point in October 2017 at -2.4% of GDP. Our last quarterly update showed a level of -1.7% of GDP in Q2.