Italy cuts growth forecast – GDP is expected to grow only slightly in 2023

Mario Draghi

Shortly before leaving, the Draghi government presented a downwardly revised economic forecast.

(Photo: IMAGO/ZUMA Press)

Rome The Italian government under the outgoing Prime Minister Mario Draghi According to insiders, it is cutting its growth forecast for the next year. Gross domestic product (GDP) is only likely to grow by 0.6 percent in 2023, according to political circles on Wednesday evening. The government in Rome had previously assumed growth of 2.4 percent. The reason is the effects of rising energy costs.

forecast for this year Italy according to insiders, economic growth of 3.3 percent, with GDP likely to weaken in the second half of the year. The third largest economy in the euro zone after Germany and France had previously calculated an increase of 3.1 percent.

However, public finances are likely to improve in 2023 due to strong revenues, sources said. According to the forecast, the mountain of debt in the southern European country will amount to only 143.2 percent of GDP next year, compared to the previously estimated 145.2 percent.

A change of government is imminent in Italy. It is unclear how the future Italian government around Giorgia Meloni’s post-fascist Fratelli d’Italia (Brothers of Italy) party will react to the economic slowdown. During the election campaign, Meloni made it clear that she did not want to take any risks in budgetary policy.

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Within the alliance, which also includes the right-wing Lega of former Interior Minister Matteo Salvini and the Forza Italia of ex-Prime Minister Silvio Berlusconi, the proposals for reacting to the explosion in energy prices differ. Officially, the change of government should not take place before the end of October, until then Draghi will remain in office.

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