House bet on falling rates

The expectation of a decline in interest rates during 2024 emerges as a possible response to economic conditions and could favor greater access to credit and incentivize the demand for mortgages, personal loans and salary-secured loans. Furthermore, it could also stimulate economic activity, encourage investment and make debt management easier for households and businesses. "The implementation of the PNRR and the resulting liquidity flows should facilitate significant investments in infrastructure and the labor market. For 2024, we therefore expect a similar trend to 2023 with potential growth in volumes in the second half of the year and the prospect of a decline in interest rates. Greater access to credit and the use of subrogation could support the financial market. Furthermore, considering the market for personal loans and salary-secured loans, a similar picture is expected, with the possibility of growth opportunities and a tendency to benefit from more favorable conditions towards the end of 2024", explains Renato Landoni, President of Kìron Partner SpA. "2023 ended with a contraction between 24% and 30% in mortgage disbursements, reflecting a complex economic context in the Euro area which has influenced the choices of the ECB by imposing a policy of rising rates to stem an extraordinary acceleration in inflation". However, after an initial phase of economic recovery in the first half of 2022, the latest economic indicators point to a slowdown, with GDP estimates revised downwards. Inflation is expected to decline to 3% in 2024 and 2% in 2025. Political instability affects business and consumer’s confidence and inflation represents a key element in determining monetary policy, its decline could push financial authorities to consider more
accommodating policies also given signs of a slowdown in the economy. Low inflation offers space for more flexible management of interest rates by central banks, which may be incentivized to maintain lower rates to support economic activity and the credit market.