Bank of Italy forecasts country's GDP to grow by 0.6% in 2024

Growth in the country remained close to zero in the final months last year, dampened by tighter credit conditions and by the persistence of high energy prices, while consumption stagnated and investment contracted, the central bank estimated in the latest issue of its Economic Bulletin.

Manufacturing activity turned downwards, employment continued to rise and wage growth remained robust.

Italian exports grew in the autumn. The current account balance was positive in the third quarter last year, thanks to the further reduction in the energy deficit and the increase in the non-energy goods surplus.

Non-resident investors made net purchases of Italian securities and the negative Target balance continued to improve. The positive net international investment position strengthened further, the bulletin said.

The fall in core inflation in the country intensified, spreading to non-energy industrial goods and to services. In December, headline inflation stood at 0.5 per cent (and core inflation at 3 per cent), it noted.

The increase in consumer prices in the country will slow to 1.9 per cent this year (from 5.9 per cent in 2023), and then diminish gradually to 1.7 per cent in 2026. Core inflation is projected to reach 2.2 per cent this year (compared to 4.5 per cent in 2023) and to fall below 2 per cent over the next two years.

Falling employment levels and slowing wage growth are expected to put further pressure on consumers and their spending.

Fibre2Fashion News Desk (DS)