In the second quarter of 2023, Italy’s GDP fell by 0.34% relative to the previous quarter, but increased by 0.55% relative to the previous year. While private consumption has risen during the past year, investments and government spending have declined. Inflation is still high at 7.40%, because of production bottlenecks in the aftermath of the pandemic, still relatively high energy prices, and persistent geopolitical tensions due to the Russian invasion of Ukraine. Nevertheless, it is gradually decreasing, as a consequence of the repeated monetary policy tightening of the ECB in the previous quarters. The OECD economic outlook expects annual inflation to gradually decline throughout 2023 and to stabilize at around 3% in 2024. GDP is expected to grow at an average annual rate between 3.5% and 4% until the end of 2024. Unemployment is expected to increase to 8.2% in the second half of 2023, and to decrease again to 8% in 2024.

October 2023