Updated December 17th, 2023 at 10:15 IST

Bank of Italy adjusts 2023 growth forecast to 0.6%

Italy's inflation aligns with ECB target; 0.7% GDP growth confirmed. 2025 outlook adjusts to 1.1%.

Reported by: Business Desk
Representative | Image:Pexels
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The Bank of Italy revised its economic projections, indicating a reduced growth forecast for the Italian economy in the coming year. The central bank now anticipates a modest 0.6 per cent growth in 2023, down from the earlier estimate of 0.8 per cent made just two months ago. The revision is attributed to emerging signs of prolonged cyclical weakness.

According to the bank's economic report, Italy's expected average EU-harmonised inflation rate for the next year is set at 1.9 per cent, aligning with the European Central Bank's target of 2 per cent for the entire eurozone.

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Confirming its October assessment, the Bank of Italy maintains that Italian gross domestic product (GDP) will experience a 0.7 per cent increase this year. Looking ahead, the report marginally adjusted the growth outlook for 2025, forecasting a 1.1 per cent expansion in the eurozone's third-largest economy, up from the previous estimate of 1.0 per cent.

In contrast, the government of Italy has more optimistic growth predictions, forecasting a 0.8 per cent expansion for 2023, followed by 1.2 per cent in the subsequent year and a further increase to 1.4 per cent by 2025.

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The Bank of Italy also revised its inflation forecasts for the period spanning 2023 to 2025, citing a faster decline in energy prices and a more pronounced slowdown in the underlying components, as indicated by recent data. The average HICP rate for the current year is forecasted to be 6.0 per cent, slightly lower than the October estimate of 6.1 per cent. Projected rates for 2024 and 2025 have also been adjusted, with a forecast of 1.9 per cent and 1.8 per cent, respectively, down from the earlier predictions of 2.4 per cent and 1.9 per cent.

 

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Published December 15th, 2023 at 22:59 IST