The Bank of Italy on Friday raised its growth forecast for this year, now expecting 3.8%, once morest 3.3% previously, under the effect of higher than expected GDP growth in the third quarter .
This surprise growth of 0.5% recorded in the third quarter compared to the previous one will also have “a knock-on effect” on GDP growth in 2023, estimates the Bank of Italy, which raises its forecast for next year to 0.4%, compared to 0.3% previously.
The institution’s prognosis for 2023 is however more pessimistic than that of the Italian government, which forecasts a 0.6% increase in GDP.
Engine of growth, household consumption “should decline at the end of the year and in the first months of next year, suffering the impact of the sharp rise in prices on disposable income”, commented the Bank of Italy in a statement.
Consumption should “remain weak until the end of 2023, to gradually accelerate therefollowing, thanks to the decline in inflation”, she continues.
Rebound in 2024
Growth “is expected to weaken in the current quarter and the following quarter”, before gradually picking up from the spring. Economic activity should gain strength in 2024, with GDP rising by 1.2%, estimates the Bank of Italy.
In a more “adverse” scenario, marked by a “permanent stoppage” of Russian gas deliveries and “rationing of energy consumption” for industry, Italian GDP might even “fall by around 1%” in 2023 and 2024, according to the Bank of Italy.
Inflation should rise to 8.8% on average in 2022 before falling, under the effect of a potential decline in energy prices, to 7.3% in 2023 and 2.6% in 2024.
Exports, which jumped 13.5% in 2021, are expected to rise 10.4% this year. Imports, up 14.8% last year, are expected to grow by 15.2%, according to these new forecasts.
In 2021, Italy’s growth had reached 6.7%, a rate not seen for more than 40 years, following a plunge of 9% in 2020, due to the Covid-19 pandemic.
ats, awp, afp
