Italy’s economy is expected to grow less than previously forecast this year, according to the country’s parliamentary budget office, raising concerns about the government’s ability to meet its fiscal targets, Bloomberg reports.
The budget office has revised its growth forecast down to 0.8%, from a previous estimate of 1%. The report, published on Wednesday, cites weak manufacturing and a clouded outlook for construction as contributing factors to the dimmer economic outlook.
This revised forecast aligns with recent statements from both Finance Minister Giancarlo Giorgetti and the Bank of Italy, who have both expressed a similar view that GDP growth in 2024 will likely be lower than initially expected. Next week, Italy’s national statistics institute will release GDP data for the third quarter, offering a clearer picture of the economy’s current performance.
The International Monetary Fund (IMF) also revised its growth forecast for Italy on Tuesday, predicting 0.7% growth for this year.
The revised economic outlook poses a challenge to Italy’s fiscal plans, which were based on a 1% growth estimate. Slower growth could make it more difficult for the government to achieve its stated deficit and debt targets.
Italy is currently under the European Union’s “excessive deficit procedure,” and has pledged to bring its deficit below the bloc’s 3% limit by 2026 and to begin reducing its debt starting in 2027.
