The low investment appetite of Italian businesses, at this time of economic and geopolitical uncertainty, as well as high cost of money, is confirmed by data on credit applications by companies, which are not growing. Companies prefer to draw on their reserves to meet current expenses, and thus postpone long-term investment plans. After hitting record lows at the end of 2021 and after a period of substantial stability-at the end of 2022 the risk of default began to rise again. In fact, in December last year, the default rate for Italian companies rose to 2.4 percent from 1.6 percent a year earlier, and the increase has continued this year, reaching 2.5 percent in the first half of the year. Given the current macroeconomic framework, it is expected that towards the end of 2023 default rates for Italian companies will reach a level around 3 percent. This is lower than the European averages and still well below both the peaks reached in 2013 (7 percent) and the alarm threshold (around 6 percent), but it nevertheless reflects the worsening credit situation of Italian companies and is beginning to raise some concern, especially because of the speed of the rise.
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