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Bank of Italy trims Italy 2022 growth forecast as downside risks increase

Bank of Italy trims Italy 2022 growth forecast as downside risks increase
Bank of Italy trims Italy 2022 growth forecast as downside risks increase Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
Published on Updated
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ROME - Italy's economy will grow by 3.8% this year, the Bank of Italy forecast on Friday, lowering a projection of 4.0% made just one month ago as a recent surge in coronavirus infections clouds the outlook.

The central bank said gross domestic product in the euro zone's third largest economy probably rose by around 0.5% in the fourth quarter of last year from the previous three months, slowing sharply from the third quarter rate of 2.6%.

"Growth prospects are subject to numerous risks, mainly to the downside," the central bank said in its quarterly forecasting bulletin, noting that the worsening COVID-19 situation had hurt consumer confidence.

The bank left its forecast for 2021 growth unchanged at 6.3%, following the record contraction of 8.9% in 2020, and said GDP would return to its pre-pandemic level around the middle of this year.

Turning to prices, the bulletin forecast that Italy's EU-harmonised consumer price inflation rate would average 3.5% this year, slowing to 1.6% in 2023.

The employment situation in Italy is seen improving only marginally. The bulletin forecast the average jobless rate will fall from 9.4% last year to 9.0% in 2022 and 8.9% in 2023.

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