Bank of Italy revises 2023 growth upwards, +1.3%: unemployment falls – Corriere.it
Bank of Italy revises 2023 GDP upwards, which is expected to expand by 1.3% from +0.6% estimated in January. For 2024, GDP would only increase by 1% (in the January estimate it was 1.2%) and in 2025 by 1.1%. In the report, the bank underscores the high level of uncertainty that still affects all estimates. The report notes that household consumption is projected to grow at a limited rate and at a similar pace to the product over the three-year forecast period, after declining late last year. Investment would slow significantly as rising financing costs and tighter credit access conditions in the private sector slowed it down. On the other hand, the impulses coming from the public component would increase thanks to the interventions of the PNRR. He adds that housing spending is expected to continue rising in the current year, benefiting from some remaining support measures for the sector, only to stagnate in the following two years. Exports are expected to grow slightly over the three-year period in line with the development of foreign demand. Due to the weak demand for investments in capital goods, which are characterized by a high proportion of imported products, imports would grow at a lower rate. Finally, the contribution of net foreign demand to GDP growth should remain positive over the three-year forecast horizon.
The unemployment rate is expected to fall to 7.7% in 2023 and to almost 7.5% in 2025. Notably, Via Nazionale revised down its unemployment estimate for 2023 to 7.7% from 8.2% in January. For 2024, the rate is still seen at 7.7% and thus at 7.6% in 2025. In the labor market – it is said – the number of hours worked, which increased significantly in the first quarter, will continue to increase during the rest of the three-year period 2023-25 at a lower rate than that of the product; the number of people in work would increase to a lesser extent. The unemployment rate is expected to fall slightly to just under 7.5 percent in 2025.
Inflation at 6.1%
The Bank of Italy estimates that consumer price inflation will average 6.1% in 2023, falling to 2.3% in 2024 and 2% in 2025 Core inflation is expected to remain high this year and fall over the next two years, with energy costs gradually coming down. Compared to the forecasts published in January, inflation in 2023 and 2024 was revised downwards by around 0.3 percentage points faster than assumed at the time, mainly due to the fall in energy prices.