(Finance) – The Bank of Italy has revised Italy’s economic growth forecasts downwardsdue to the deterioration of the economic situation produced by the outbreak of the war in Ukraine, and made the forecasts on the basis of two hypotheses, one “base scenario” and an “adverse scenario”. The current estimates are part of the ECB’s economic forecasts on the Euro Area published with the contribution of the Bank of Italy.
In the basic hypothesis in which it is assumed that the war remains confined to Ukraine and continues for the whole current year, the Istituto di Via Nazionale has indicated a GDP at + 2.6% for 2022 to + 1.6% in 2023 and + 1.8% in 2024, worsening compared to the January forecasts which indicated growth for 2022 to 3.8%, for 2023 to 2.5% and for 2024 all 1.7%.
At the same time, the forecasts of inflation indicating growth 6.2% instead of 3.5% this year2.7% and not 1.6% in 2023 and 2% from 1.7% in 2024.
On the other hand, the forecasts of unemployment with a rate at 8.6% on this year’s averagenext to 8.5% and 8.2% in 2024, compared to previous estimates which indicated unemployment at 9% in 2022, 8.9% in 2023 and 8.7% in 2024 Expectations on employment growth also improve for 2022: + 1.9% this year (from + 1.7%), + 0.5% in 2023 and 2024.
These estimates – it should be noted – were formulated on taking into account the data released by Istat on May 31, relating to GDP in the first quarter of 2022, which was revised upwards by three tenths of a percentage point to 0.1% and May inflation data indicated 7.3 percent based on preliminary estimate.
There is also an “adverse scenario” regarding the war in Ukraine, which assumes a total blockage of energy supplies from Russia starting from the summer quarter. In this case I limit the GDP of Italy would mark a “almost zero” growth in 2022 it would mark a -1% in 2023 and return to growth in 2024. Inflation instead would be close to 8% this year and would remain high at 5.5% in 2023, only to drop significantly in 2024.
“The macroeconomic situation is strongly conditioned by the evolution of the conflict in Ukraine, the developments of which remain highly uncertain and can determine very different trajectories for the Italian economy in the coming years”, explains the Bank of Italy, adding that “an intensification of the hostilities would have heavier repercussions than those incorporated in the base scenario “and therefore we also consider” an adverse scenario characterized by a stoppage of supplies starting from the summer quarter, only partially compensated for our country by other sources “, which would have” direct repercussions “for manufacturing activities with a higher energy intensity