GEORGE V MAGAZINE / REUTERS
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The institution also revised downwards its estimates for 2027 and 2028, betting on 1.7% and 1.9% respectively, against 1.9% and 2.3% previously, in data not adjusted for working days.
Economy Minister Giancarlo Giorgetti had assured on Thursday that Italy’s growth “could reach 0.7%” this year, but that this downward correction would not have an impact on the accounts.
The right-wing and far-right coalition led by Giorgia Meloni had previously forecast a 1% increase in gross domestic product (GDP) for the current year, despite zero growth recorded in the third quarter.
“We have made extremely cautious forecasts on public finances” and “as we have done in the past, we will obtain even better results than announced,” Mr Giorgetti said.
Rome has committed to reducing the public deficit to 2.8% of GDP by 2027, below the 3% ceiling set by the European stability pact, which leaves little room for an expansionist economic policy.
Adjusted for working days, the increase in GDP would be 1.5% in 2025, 2.8% in 2026 and 3.1% in 2027, the Bank of Italy said.
Despite ‘an environment of great uncertainty, particularly regarding the trade policies of the new US administration, growth in external demand will consolidate’, the institution estimates.
Italy is feeling the pinch from the woes of Germany, its main trading partner, which barely had a recession on a 0.1% downturn in GDP in the third quarter.
After zero growth in the third quarter, GDP should grow ‘at a moderate pace’ in the fourth, the Bank of Italy estimates.
“Growth could accelerate from the second half of next year,” thanks to the recovery in consumption and exports.
In a context of slowing inflation, household consumption should remain neutral in 2025 and grow by 0.5% in 2025 and 1.9% in 2026.
Inflation reached 3.9% in 2024 and 6.1% in 2025 and 2026.
At the beginning of the year, the Italian Institute of Statistics had ceased its growth forecast for 2024, 2025, 2026 and 2027 and counting only on a GDP increase of 0.5%, compared to 1% estimated in June.
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