Italy unlikely to reach its 2024-2025 GDP goals, Bank of Italy and budget watchdog say
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Porta Nuova district in Milan, Italy, October 25,
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ROME, Nov 5 (Reuters) - The Italian government's
growth targets for 2024 and 2025 now look hard to
achieve, the country's central bank and budget
watchdog UPB said on Tuesday.
The Treasury set a growth target of 1% this year and
1.2% in 2025 in its multi-year budget plan unveiled in
September.
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Italian gross domestic product stagnated in the third
quarter compared with the previous three months,
preliminary data showed last week, missing forecasts
and casting a shadow over growth prospects in the euro
zone's third largest economy.
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Barring further revisions, reaching 1% growth this
year would require a very strong GDP reading in the
fourth quarter, which the Bank of Italy said looks
unlikely.
"According to recent data, which is still insufficient
to paint a complete and reliable picture, economic
activity is seen struggling to regain momentum at the
end of this year," the central bank said in
parliamentary testimony on Rome's 2025 budget.
Italy's strong growth rebound from the COVID-19
pandemic, fueled by costly government-funded building
incentives, is already petering out.
ING economist Paolo Pizzoli said after the third
quarter flash estimate that without a strong fourth
quarter rebound this year's growth would be no higher
than 0.5-0.6%, following last year's 0.7% rate.
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Budget watchdog UPB also warned on Tuesday that the
government's estimates were increasingly subject to
downside risks.
"Next year's target relies heavily on domestic demand,
which depends to a large extent on the implementation
of Italy's post-COVID recovery plan," UPB said.
Italy has
spent around 45%
of the more than 100 billion euros ($108.96 billion)
it has received so far from European Union COVID-19
recovery funds, short of a target set in 2022.
Implementation of the plan is seen by investors and
rating agencies as an important measure of Italy's
ability to boost its sluggish economy and keep in
check the country's creaking public finances.
($1 = 0.9178 euros)
Reporting by Giuseppe Fonte, editing by Gavin Jones
Our Standards: The Thomson Reuters Trust Principles.
