Italy's GDP expected to grow by 0.7% in 2023, 2024

This GDP rise would be driven primarily by the contribution of domestic demand net of inventories—by 0.8 percentage points (pp) in 2023 and by 0.7 pp in 2024.

This is in contrast to a marginally negative contribution of net foreign demand in 2023 (minus 0.1) and 2024 (nil)—expected to be negligible in both years, according to a release by the official statistics agency Istat.

Internal demand will be mainly influenced by private consumption—1.4 per cent in 2023 and 1 per cent in 2024, thanks to the deceleration of inflation, associated with a gradual—albeit partial—recovery in wages and employment growth.

Investments, although still growing, are expected to significantly slow down compared to the previous two years—0.6 per cent in 2023 and 2024.

Over the two-year forecast period, employment will grow in line with GDP—by 0.6 per cent in 2023 and by 0.8 per cent in 2024. The improvement in employment will be accompanied by a decrease in the unemployment rate to 7.6 per cent this year and 7.5 per cent in 2024.

Inflation deceleration, mostly determined by the decline of energy raw material prices and restrictive monetary policies implemented by the European Central Bank, will moderate the dynamics of resident household expenditure deflator both in 2023 (5.4 per cent) and in 2024 (2.5 per cent).

ALCHEMPro News Desk (DS)