(Finance) – The Bank of Italy confirmed its economic growth forecast for this year as a whole at 0.7%but revised the estimate for 2024 downwards to 0.6% and slightly raised the estimate for 2025 to 1.1% and forecasts a similar level of expansion for 2026 as well.
The new numbers were published as part of projections developed in coordination with the Eurosystem of central banks and the ECB, which yesterday published updated figures for the euro area average. They are based on economic data available until November 30, according to a press release. These forecasts are updated every three months and last September Banktalia estimated growth for 2023 at 0.7%, that for 2024 at 0.8% and that for 2025 at 1%.
“After the slight increase in the summer months, the most recent economic information indicates that GDP would have stagnated in the current quarter – states Bank of Italy -. Product would gradually expand again from the beginning of next year, supported by the recovery of disposable income and foreign demand”. The institution warns that these projections “are surrounded by high uncertainty, with risks for growth mainly oriented downwards. The geo-political context remains one of the main factors of instability, which may give rise to new increases in raw material prices and a deterioration in the confidence of families, businesses and investors. Non-negligible risks are also connected with the evolution of global economic activity – we read – which could be more affected by the difficulties of the Chinese economy and the uncertainty linked to international tensions” . A possible worsening of financing conditions, more marked than expected, could also contribute to slowing down growth.
Inflation forecasts for the Peninsula have been revised downwards, which is now estimated at levels lower than the ECB’s target value from next year (2% symmetrical, given that the latter is relative to the Eurozone average and not just Italy). Now the cost of living is forecast to be 6% for this year, a drastic reduction to 1.9% for 2024, 1.8% for 2025 and 1.7% for 2026. For underlying inflation, the index excluding energy and food, Bank of Italy forecasts 4.5% growth on average this year, 2.2% next year, 1.9% in 2025, 1.8% in 2026.