The International Monetary Fund predicts that Italy’s GDP growth will slow down in the coming years, with disinflation persisting. They anticipate a 0.7% increase in GDP for the next two years, followed by a temporary slowdown in 2026 and 2027. This projection comes after the IMF’s recent discussions with Italy for its 2024 Article IV Consultation.
The IMF predicts that economic growth will eventually align with the shrinking working-age population through increased productivity from structural reforms and investments. Inflation is expected to decrease to 1.7 percent in 2024 and reach the target of 2 percent by 2025.
The IMF predicts an increase in wage growth over the next few years, with firms absorbing the costs from their profits, which will help keep inflation in check. The drop in energy prices has led to rapid disinflation and a return to surplus in the current account, highlighting the need for improved productivity.
