The IMF cuts Italian growth estimates, for 2025 only +0.7%
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MILAN – From the International Monetary Fund comes a reminder of reality regarding Italy’s growth forecasts, with the prospect of a slowdown becoming increasingly concrete.
In updating the estimates on the trend of the global economy, Washington sharply cuts the Italian GDP figure in 2025: the Fund in fact confirms growth of 0.7% for Italy in 2024, but revises that of 2025 downwards to +0.7%, or 0.4 percentage points less than the January estimates. How do you talk this data with the government’s Def? The Meloni executive, who only released the trend picture of public finance, has forecast growth of 1.2% next year.
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With +0.7% in 2025, Italy is at the bottom of the G7 in terms of growth. In fact, the Fund’s estimates indicate a +1.3% for the Germanya +1.4% for the Francea +1.0% for the Japana +1.5% for the United Kingdoma +2.3% for the Canada and a +1.9% for the United States.
For Italy, the Fund then estimates an inflation to 1.7% in 2024, destined to then rise again to 2% in 2025. The figure for 2023 is 5.9%. As for the rate unemploymentthe estimate is that it will rise to 7.8% in 2024 from 7.7% in 2023 and then continue to increase and reach 8% in 2025.
The global scenario, decreasing inflation
Globally, the Fund expects growth of 3.2% in 2024 and 2025, the same pace already recorded last year. The forecast for 2024 has been revised upwards by one tenth compared to the January update and by three tenths compared to the forecast made in October in Marrakech. However, the estimates for 2025 remain unchanged. However, they remain below the historical annual average (2000-19) of 3.8%, a cruising pace which is affected by “the continuation of restrictive monetary policies and the progressive withdrawal of fiscal support measures as well as low underlying productivity growth.”
Appropriate to cut rates
Precisely on the trend of inflation (seen at 5.9% in 2024 and 4.5% in 2025), the Fund writes that “where short-term inflation expectations and underlying inflation indicators are clearly decreasing towards the objective, delays in cuts in nominal rates risk actually causing a tightening of monetary policy, with an increase in real rates and, considering the long transmission delays, economic weakness and outcomes below the target. In those cases, gradually moving rates toward a more neutral policy position, while continuing to signal commitment to price stability, is appropriate.”
For the Chinathe fund expects a slowdown from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025 (estimates unchanged compared to January) while the projections for the Russia to 3.2% in 2024 after 3.6% last year and 1.8% in 2025. In January the estimates were 2.6% and 1.1% respectively.
Among the calls to governments there is also a renewed focus on fiscal consolidation to recreate room for maneuver in order to cope with future shocks and put a brake on the increase in public debt, defined as “appropriate” considering that the main central banks are expected to an easing of monetary policy this year and economies are in a better position to absorb the effects of fiscal tightening.
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