The European Commission said Monday that it has cut its growth forecasts for Italy to 0.7% this year and 0.9% in 2026, down from the figures of 1% and 1.2% it gave respectively in its autumn economic forecasts.
"The economic expansion is set to be supported by domestic demand, in particular investment fuelled by RRF-related spending," the Commission said, referring to Recovery and Resilience Facility.
"Inflation is forecast to remain below 2% in both 2025 and 2026, on the back of negative import price dynamics and moderate domestic costs increases.
"The government deficit is projected to continue falling from 3.4% of GDP in 2024 to 3.3% in 2025 and 2.9% in 2026.
"By contrast, the debt ratio is set to rise over the forecast horizon, driven by the lagged impact of housing renovation tax credits accrued in the deficit until 2023".
