The Bank of Italy has revised its growth projections for the country’s economy, now expecting a 0.7% expansion for both this year and next.
This update, announced on Friday, represents a reduction from the estimates made in October, which predicted a 0.8% growth for this year and 0.9% for 2024.
These revised forecasts fall short of the Italian government’s official expectations of a 1.0% growth for this year and 1.2% for 2025.
Economy Minister Giancarlo Giorgetti acknowledged on Thursday that Italy, the euro zone’s third-largest economy, is likely to see a growth rate of 0.7% by year-end, citing a significant downturn in the industrial sector.
The central bank’s forecasts are not adjusted for the number of working days per year, a common practice for international comparison adhered to by the government, the European Union, and other international bodies.
However, when making such an adjustment, the Bank of Italy indicated that growth for this year would be around 0.5%, with an increase to 1% for the following year. This suggests that the Italian economy is expected to experience stagnation in the final quarter of the year, which aligns with the recent 2024 forecast by the national statistics bureau ISTAT.
In terms of inflation, the Bank of Italy forecasts that the average EU-harmonised inflation rate for Italy will be 1.1% this year, consistent with its October projection.
Looking ahead to 2025, inflation is anticipated to rise to 1.5%, which is slightly lower than the previous estimate of 1.6%.
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