'Italy set for slow GDP growth in 2023'
Italy's central bank revised higher its 2023 growth forecast to 0.6 per cent, with the country's economic expansion set to pick up after that.
The revision, from a previous estimate of 0.4 per cent, comes amid improving sentiment in Europe's top economies thanks to declining energy prices, raising hopes that recessions may be dodged.
The change brings the Bank of Italy's forecast into line with the forecast with Italy's far-right government under Prime Minister Giorgia Meloni.
The bank also revised its 2022 growth estimate up to 3.9 per cent, from 3.8 per cent previously, although it said economic activity had weakened in the final quarter of the year.
That was due to "persistently high energy prices and the dampening of the recovery of the sectors most affected by the pandemic, such as trade, transport and accommodation services" the central bank said.
The Bank of Italy cautioned its forecasts came amid "high uncertainty" due to the ongoing war in Ukraine.
Nevertheless, "it is assumed that tensions associated with the war will still remain high in the first months of 2023 and gradually decline over the forecast
horizon," it said.
Italy's economy should expand by 1.2 per cent both in 2024 and 2025, said the central bank, boosted by both exports and domestic demand.
Inflation, which rose to an average of 8.7 per cent last year, should fall to 6.5 per cent this
year and continue to decline, the bank said. It forecast a 2.0 per cent inflation rate in 2025. Economic growth in Italy reached 6.7 per cent in 2021, a rate unseen in the past 40 years, after plunging by 9 per cent in 2020 due to the Covid-19 pandemic.