The Bank of Italy Reduces Its GDP Forecast for 2024 to 0.6% and Anticipates Inflation to Fall Below 2%

The bank predicted in an economic report that Italy's average EU-harmonised inflation rate would be 1.9% in the coming year, which is within the 2% target set by the European Central Bank for the euro zone as a whole.

This year, the gross domestic product (GDP) of Italy will increase by 0.7%, according to the Bank of Italy, which reaffirms its October forecast.

In anticipation of the future, the report slightly improved the growth forecast for the third largest economy in the euro zone for 2025, increasing it from 1.0% to 1.1%.

The Italian government projects economic expansion of 0.8% in 2023, 1.2% in 2024, and 1.4% in 2025.

Inflation projections for 2023-2025 were revised downward by the bank, "in light of the most recent data indicating a more pronounced deceleration in the underlying component and a more rapid decline in energy prices."

This year, the average HICP rate is anticipated to be 6.0%, up from the 6.1% estimated in October.

The bulletin states that growth will decelerate to 1.9% in 2024 and 1.8% in 2025, from 2.4% and 1.9%, respectively, as predicted previously.