156
Italy Real GDP growth is projected at 3.7% in 2022, slowing to 0.2% in 2023, before picking up moderately to 1% in 2024. High energy prices will act as a brake on production in energy-intensive industries, while falling real incomes due to high inflation, increasing interest rates and subdued export market growth will moderate demand growth. Unemployment will rise and labour market participation decline, with employment shrinking in 2023. Consumer price inflation is expected to come down only gradually from about 10% at the end of 2022, as energy price caps are phased out in 2023 and recent increases in energy and food prices are triggering wider price pressures. Monetary policy tightening will partly be offset by higher public investment related to the National Recovery and Resilience Programme. Timely implementation of new investments, reform of the competition law and the effective targeting of energy crisis support measures will be paramount to sustain activity in the short term and to lay the ground for sustainable growth in the medium term. Activity is slowing Following strong growth over the first three quarters of 2022, recent high-frequency indicators point to a decline in activity. Industrial production has been resilient, but retail sales and confidence indicators have been weakening. Employment has been trending down recently, although unemployment has continued to recede. Overall, the recent weakness of activity indicators, rising borrowing costs and the erosion of real household incomes related to high inflation are driving a turning point in activity.
Italy 1
1. Gross public debt, Maastricht definition. Source: OECD Economic Outlook 112 database; OECD Economic Outlook 110 database; OECD Economic Outlook 111 database; and OECD calculations. StatLink 2 https://stat.link/0zmcfk
OECD ECONOMIC OUTLOOK, VOLUME 2022 ISSUE 2: PRELIMINARY VERSION © OECD 2022