Italy – 2023-2024 Scenario: a transition year
- Recent economic trends
- The outline of our scenario
Despite inflation among the highest in Europe, Italy avoided the slowdown recorded in the Eurozone as a whole in the first quarter. However, it will be difficult for it to be spared by the deterioration in the European and international environment. Growth in the last two years has been marked by large magnitudes and high volatility in the contributions to demand, due to both the post-pandemic recovery and the absorption of the energy shocks. This phase seems to be over, with most of the components of demand having exceeded pre-pandemic levels. As a result, GDP growth rates over the forecast horizon should be more in line with historical averages. Growth is estimated at 1.2% in 2023 and 1.1% in 2024.
Companies are facing an environment that remains unfavourable to investment. Partially offset by the improvement in margins resulting from the drop in input costs, investment will be penalised by both a slowdown in demand and higher financing costs, with the effect of the monetary policy tightening, which is expected to fully materialise in 2024. Despite a 1.4% overhang at the end of 2022, investment growth is expected to drop from 9% in 2022 to 2.9% in 2023 and 1% in 2024.Sofia TOZY, Economiste