for 2023 +1.3%, new debt record – Corriere.it

After the rebound in the first quarter, GDP growth stopped, mainly due to the contraction in manufacturing activity. However, the growth forecast for this year remains unchanged (1.3%). While for 2024 and 2025 the Bank of Italy revises the estimates in the Quarterly Economic Bulletin downwards, forecasting +0.9% and +1% respectively. The new projections point to HICP inflation at 6% on average this year (8.7 in 2022), with a sharp slowdown to 2.3% in 2024 and 2% in 2025. Employment has exceeded pre-pandemic values, while the unemployment rate fell below 8%. In May, the public debt increased by 4.8 billion compared to April, reaching a record level of 2,816.7 billion euros.

The reasons for the braking

The economic bulletin of the Bank of Italy updates, with some downward adjustments for 2024-2025, the estimates released last month. The reasons for the slowdown are linked to the slowdown in investments, the contraction of industry and the drop in exports while consumption is still growing but at a slower pace. Services are doing well, especially those related to tourism and recreational activities, while the disappearance of the effects of the Superbonus is causing a slowdown in the construction sector. The international and European slowdown also weighed on the economy. The macroeconomic picture continues to be characterized by strong uncertainty. The risks are linked to the evolution of the war in Ukraine and to the possibility of a greater tightening of financing conditions than expected. In the euro area, high inflation and the ECB’s monetary restrictions are making themselves felt, with the first effects on financing conditions.

The trade balance

Also in May, Italy recorded a trade surplus with the rest of the world of €4.7 billion, compared to a deficit of €62 million in 2022. Exports increased by 0.9% year-on-year, while imports they decrease by 7.6% according to Istat. In May 2023, Istat estimates a slight cyclical downturn for exports (-0.3%) and a wider reduction for imports (-3%). The decrease on a monthly basis in exports due to the contraction in sales to the EU area (-1.7%), while exports to non-EU areas are increasing (+1.2%).