Italian Economy Projections

MILAN (Reuters) – The Italian economy will expand by 0.7% both this year and next, according to the country's central bank, which adjusted its forecasts made in October due to a weakening flow of data.

These projections fall below the Italian government's forecasts of 1.0% growth for this year and 1.2% in 2025.

On Thursday, Economy Minister Giancarlo Giorgetti indicated that the euro zone's third largest economy is likely to finish the year growing at 0.7%, highlighting the ongoing slump in the industrial sector.

Previously, the central bank had forecasted 0.8% growth for this year and 0.9% for 2025. The forecasts do not adjust for the number of days worked each year, in line with the methodology used by the government, the European Union, and other bodies for international comparisons.

When adjusted for the number of days worked, the Bank of Italy noted that growth for this year would stand at 0.5%, with an increase to 1% next year. This suggests that the economy is likely to stagnate again in the final quarter of the year, akin to the stagnation observed between July and September, a forecast also echoed by national statistics bureau ISTAT for 2024.

The central bank projects Italy's average EU-harmonised inflation rate to be 1.1% for this year, remaining unchanged from its October estimates. Inflation is expected to rise to 1.5% in 2025, slightly lower than the previous estimate of 1.6%.