The Bank of Italy on Friday confirmed
its January forecasts and left Italy's 2024 GDP estimate
unchanged at +0.6%.
Next year it expects growth of 1% and in 2026 of 1.2%.
"Economic activity would benefit from the recovery in foreign
demand and household purchasing power, but still restrictive
financing conditions and the downsizing of housing incentives
would weigh on investments," the central bank wrote in its
latest macroeconomic projections.
The Bank of Italy also revised down its inflation estimates,
which "will fall sharply in 2024", to 1.3% (last December it
forecast 1.9%).
"The sharp decline in inflation in the current year would mainly
reflect the negative contribution of intermediate goods and
energy prices, only partly offset by the acceleration in wages
(expected to increase by about 3.5 per cent per year on average
in the three-year period 2024-26). Core inflation would fall to
2 per cent on average this year and decline further in the next
two years," the BoI wrote.
It added that employment will grow but less than output.
In the next three years, it said, "employment, after rising
sharply in 2023, will continue to grow but at rates lower than
that of output".
"The unemployment rate will slowly decrease to 7.4 per cent in
2026, more than 5 points lower than the peaks reached after the
debt crisis a decade ago," it concluded.
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