The Bank of Italy has raised its 4-year GDP growth forecast for the country by an average of 0.1 percent a year between 2017 and 2020. In a note released on Friday the Italian central bank said that it projected Italy’s gross domestic product to grow by a seasonally adjusted rate of 1.6 percent in 2017, 1.4 percent next year, and by 1.3 percent in 2019 and 2020. The report paints a slightly rosier picture than the figures the European Commission’s macro-economic forecast, published in November, which projected GDP growth of 1.5 percent in 2017, 1.3 percent next year, and just one percent in 2019.
The Italian central bank’s report sees the employment rate rising by 4 percent between 2017 and 2020, with the rate of unemployment falling to 10.5 percent in 2020 from the 11.7 percent registered in 2016.The bank said that Italian economic activity will be driven by domestic demand over the next four years with an expansion in household expenditure due to growth in real disposable income.
A “consolidation of the global cyclical recovery” and “accommodating monetary and financial conditions” are also expected to bolster the national economy. The figures are based on “more favorable outlooks” on foreign and domestic demand as well as interest rates, the report said. However, the Bank warned that “rising geopolitical tensions” could hamper the global economic recovery.
The economic outlook projected by the bank will form part of the political backdrop against which Italians will go to the polls in a general election next year. According to Repubblica, Italian President Sergio Mattarella has agreed with the country’s main political parties that the vote should be held on March 4. Although this has yet to be confirmed the elections must take place before May 20th, according to the Constitution.