MILAN – The Financial institution of Italy on Friday lowered its expectation for financial progress this yr to 2.6% from a forecast of three.8% given in January, citing the uncertainty surrounding Russia’s invasion of Ukraine.
The financial system is seen increasing by 1.6% in 2023 and 1.8% in 2024, up from earlier estimates of two.5% and 1.7%, respectively, the central financial institution added in a press release.
Nonetheless, the financial institution stated its forecasts had been drawn up earlier than nationwide statistics institute ISTAT revised up Italy’s first quarter gross home product information on Could 31 to point out a 0.1% improve as a substitute of a beforehand reported 0.2% decline.
This revision, all else being equal, would add 0.4 share factors to Italy’s progress this yr, the financial institution stated, that means it will in all probability be round 3% somewhat than 2.6%.
The central financial institution additionally warned that in a worst-case situation – in case of a cease to Russian power imports – the financial system wouldn't develop this yr, decline by greater than a share level in 2023 and return to progress in 2024.
The BOI additionally stated it sees inflation at 6.2% this yr, up from a 3.5% forecast in January, whereas estimates for 2023 and 2024 had been raised to 2.7% and a couple of% from 1.6% and 1.7%, respectively.
The central financial institution’s new projections observe these printed on Thursday by the European central financial institution, that had been revised up for inflation and down for progress for the entire bloc.
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