Bank Of Italy Lowers GDP Estimate To +0.7%

Italy’s GDP will slow down between 2023 and 2025. This is explained by the forecasts of the Bank of Italy contained in the quarterly economic bulletin.

Gross domestic product is expected to increase 0.7% this year, 0.8% in 2024, and 1% in 2025, according to the latest estimates. Updated forecasts in July instead predicted GDP growth of 1.3% in 2023, 0.9% in 2024, 0.9% in 2024, and finally 1% in 2025.

“Growth will be impacted by tighter financing conditions and weak international trade,” the bulletin says, “GDP will instead benefit from the effects of the National Recovery and Resilience Plan and the gradual restoration of households’ purchasing power.”

Inflation in 2024 is expected to decline to 2.4% in 2024 from 6.1% in 2023 and continue to decline in 2025: +1.9%. “The decline reflects a sharp slowdown in import prices, determined primarily by a decline in the trend level of prices for energy raw materials. Core inflation will fall to 2.3% in 2024 (from 4.6% in 2023) and to 1.9% in 2025, which corresponds to the gradual fading of the effects from past energy price increases and a slowdown in domestic demand.”

The picture is such that geopolitical tensions are rising, and the Chinese economy remains a source of concern. Added to this is “the greater rigidity of credit conditions in Italy, as well as in the euro area as a whole.”