Over the forecast period, the increase in GDP would be supported mainly by the contribution of domestic demand net of inventories at 1.0 percentage points (pp) in 2023 and 0.9 pp in 2024 and the smaller contribution of net foreign demand at 0.3 pp and 0.2 pp, respectively. In 2023, inventories are expected to make a marginal negative contribution at -0.1 pp to be followed by 0 pp in 2024, the Italian National Institute of Statistics (Istat) said in a press release.
Over the two-year forecast horizon, employment, measured in terms of full-time equivalent (FTE), will show growth in line with that of GDP at 1.2 per cent in 2023 and 1 per cent in 2024. The improvement in employment will be accompanied by a decline in the unemployment rate to 7.9 per cent this year and 7.7 per cent the following year.
Falling energy commodity prices and restrictive policies implemented by central banks, will be reflected in a reduction in the household consumption expenditure deflator both in the current year at 5.7 per cent and, to a greater extent, in 2024 at 2.6 per cent.
The forecast scenario is based on favourable assumptions of price reduction in the coming months and the implementation of a recovery and resilience plan for the next two years.
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