Key facts
- The Bank of Italy forecasts 0.6% GDP growth for Italy in 2024.
- The 2027 growth outlook has been revised down to 0.4% from 0.5%.
- Inflation is projected to reach 3.1% in 2024, up from a previous 2.6% estimate.
- Inflation is expected to slow to 2.0% in 2025, revised up from 1.8%.
- The central bank anticipates stagnant quarterly GDP for the remainder of 2024.
The Bank of Italy has adjusted its economic outlook for Italy, trimming the 2027 growth forecast and anticipating a significant increase in inflation for the current year. The central bank now projects Italy's economy to grow by 0.6% in 2024 and 0.4% in 2027, a slight reduction from its earlier estimate of 0.5% for 2027. This downward revision is attributed to anticipated weaker domestic demand, influenced by rising energy prices and heightened geopolitical uncertainty.
These projections are part of a coordinated effort among euro zone central banks to contribute to the European Central Bank's broader forecasts for the region. Italy's gross domestic product (GDP) grew by 0.3% in the first quarter of the year, according to revised data from ISTAT. The Bank of Italy anticipates that quarterly GDP will remain stagnant through the end of 2024 before gradually resuming growth in early 2027. The impact of higher commodity prices on consumption is cited as the primary reason for the slight downward revision in the 2027 forecast.
For inflation, the Bank of Italy now expects Italy's EU-harmonised consumer price inflation rate (HICP) to reach 3.1% this year, a sharp increase from the 2.6% forecast in April. Inflation is projected to slow to 2.0% in 2025, an upward revision from the previous 1.8% estimate. The central bank also projected a 0.7% GDP growth rate for 2028, which would mark the sixth consecutive year of sub-1% growth for the Italian economy.