IMF revises Italy’s growth downwards: GDP falling and debt rising

John

By John

The International Monetary Fund (IMF) revised its forecast downwards economic growth for Italy, with a GDP expected to increase by 0.7% In the 2024 and of 0.8% In the 2025. This revision involves a slight cut of the 0.1% compared to July estimates for the following year. The situation is particularly critical for the Germanyfor which the Fund expects zero growth for 2024 (-0.2 percentage points compared to July) and an increase limited to 0.8% In the 2025.

The impact of the manufacturing crisis and the hope of the Pnrr

In his report, the IMF highlights the persistent weakness of the sector manufacturing as one of the main factors slowing the growth of countries such as Italy and Germany. However, the Fund expects that Italy can find support in the internal demandfavored by the investments planned in Pnrr (National Recovery and Resilience Plan). This could provide a boost to the economy, although the overall situation remains fragile.

Public debt and deficit: long-term prospects

According to the International Monetary FundThe Italian public debt is destined to rise to the 136.9% of GDP in 2024compared to 134.6% estimated for this year. For the 2025the international institution expects a further increase until 138.7%with a trend that should bring the debt/GDP ratio to 142.3% by 2029. At the same time, the deficit should gradually decrease from 4.0% In the 2024 al 3.8% In the 2025and then stabilized at 3.1% by 2029.

Unemployment rate: a partial improvement for Italy

The unemployment rate in Italy it is expected to decrease from 7.7% In the 2023 al 7.0% In the 2024before going back slightly to the 7.2% In the 2025. These numbers remain above the averageeuro areawhich is expected to stand at 6.0% for this year and beyond 5.8% In the 2024. Looking at other European countries, the France presents stable unemployment around 7.4% In the 2024 et al 7.2% In the 2025while the most critical situations remain in Spain And Greecewith double-digit rates: 11.6% And 10.5% respectively for this year, and 11.2% And 10.1% In the 2025.