Bank Of Italy Lowers Growth Forecast For 2024

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Bank Of Italy Lowers Growth Forecast For 2024

Bank of Italy Lowers 2024's Growth Forecast To Only 0.6%

According to the latest release by the Bank of Italy, the country's economy will only grow by +0.6% in the year 2024. Earlier, the central bank had issued a +0.8% forecast for GDP growth in 2024.

The Bank of Italy believes that the economy is still facing cyclical weakness, which has proven to be more consistent than initially thought.

Inflation To Reach 1.9% In 2024

As for the inflation forecast in 2024, Italian officials believe that it will be around 1.9%. Given that the ECB's target for inflation is 2.0%, it looks like the inflation situation in Italy will prove significant next year.

As for the GDP growth in 2023, Italian officials have cited a figure of 0.7%. After the recent statement, the Bank of Italy has once again confirmed the forecast it made in October.

The central bank officials also issued a new outlook for 2025 GDP growth, which has moved from 1.0% to around 1.1%. Given that Italy is the 3rd largest economy in the EU zone, any significant growth will also be positive for the entire European Union.

To conclude, 0.8% growth is expected in 2023, which will move to 1.2% in 2024. For the year 2025, the GDP growth will extend even further and touch 1.4%.

While the central bank is hopeful about improving its growth rate every year, the inflation will likely go down. Now that the energy prices have gone down, the inflation in Italy will also move lower.

In the Italy, the HICP rate (average) is expected to be around 6.0% in 2023. A few months ago, the Bank of Italy had issued a forecast of 6.1%. In 2024, the HICP will move lower towards 1.9% and then 1.8% in the year 2025.

The bottom line is that the GDP growth will remain weak but positive in Italy. At the same time, the inflation will go down on accounts of low energy prices. However, any sudden surprises from the energy markets could spark another wave of consistent inflation in the country.

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