MNI BRIEF: Italy '24 Growth at 0.6%, '25 Inflation Sub-2% -BOI
MNI (LONDON) - Italy’s economy is projected to grow by 0.6% in 2024 (0.8% when adjusted for working days), according to the Bank of Italy’s latest economic projectiones published on Friday, which forecasts growth significantly below the government’s target of 1%.
Economic expansion is expected to pick up in 2025 and 2026, with growth projected at 1% and 1.2%, respectively, driven by higher consumption from improved disposable income and a recovery in exports due to stronger foreign demand. The Bank of Italy slightly raised its October projections from June, reflecting adjustments made in the government’s medium-term fiscal plans.
Inflation is forecast to remain low, at 1.1% in 2024, and largely unchanged in 2025 (1.5%, down 0.1 percentage points) and 2026 (1.6%). Growth forecasts are clouded by global uncertainty, with risks posed by China’s weak economy and ongoing conflicts in Ukraine and the Middle East, which could dent business and consumer confidence. Domestic demand could also falter if the effects of monetary tightening are stronger than anticipated. Inflation risks are seen as balanced, with concerns over international tensions, weaker wage increases, and profit margin compression.