MILAN - The Bank of Italy on Friday lowered its expectation for economic growth this year to 2.6% from a forecast of 3.8% given in January, citing the uncertainty surrounding Russia's invasion of Ukraine.
The economy is seen expanding by 1.6% in 2023 and 1.8% in 2024, up from previous estimates of 2.5% and 1.7%, respectively, the central bank added in a statement.
However, the bank said its forecasts were drawn up before national statistics institute ISTAT revised up Italy's first quarter gross domestic product data on May 31 to show a 0.1% increase instead of a previously reported 0.2% decline.
This revision, all else being equal, would add 0.4 percentage points to Italy's growth this year, the bank said, meaning it would probably be around 3% rather than 2.6%.
The central bank also warned that in a worst-case scenario - in case of a stop to Russian energy imports - the economy would not grow this year, decline by more than a percentage point in 2023 and return to growth in 2024.
The BOI also said it sees inflation at 6.2% this year, up from a 3.5% forecast in January, while estimates for 2023 and 2024 were raised to 2.7% and 2% from 1.6% and 1.7%, respectively.
The central bank's new projections follow those published on Thursday by the European central bank, that were revised up for inflation and down for growth for the whole bloc.
