EU: Italy's growth weak and public debt set to rise, better Greece and Portugal
The EU executive points to a gradual recovery of activity after a particularly weak 2023
from our correspondent Beda Romano
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BRUSSELS - The spring economic forecasts published by the European Commission today, Wednesday 15 May, are relatively optimistic. The EU executive points to a gradual recovery of activity, after a particularly weak 2023. On the Italian front, despite an improvement in the situation, public debt is set to rise again, while it should continue to fall in two other particularly indebted countries, Greece and Portugal.
"The economy picked up sharply in the first quarter, confirming that we have turned a corner after a very challenging period," explained Economic Affairs Commissioner Paolo Gentiloni. "We expect growth to gradually accelerate this year and next, as private consumption is supported by falling inflation, a recovery in purchasing power, and continued employment growth.
GDP expected +0.8% in 2024 in the eurozone
According to the European Commission, the eurozone's gross domestic product is expected to grow by 0.8 per cent in 2024 and 1.4 per cent in 2025, compared to 0.4 per cent last year. Compared to February's estimates, the changes are very small (at that time the forecasts stood at 0.8 and 1.5 per cent respectively). Italy continues to be marked by weak growth. According to the EU executive, the economy is expected to grow by 0.9% this year and 1.1% next year.
On the consumer price front, the Commission notes a decline in inflation. From its peak in October 2022, when it stood at 10.6 per cent annually, inflation in the eurozone hovered around 2.4 per cent in April. "Inflation," reads the EU executive's report, "is expected to continue falling and will reach the target slightly earlier in 2025 than in the winter forecast," published in February. In Italy, inflation will be 1.6 in 2024 and 1.9 per cent in 2025.
The Public Finance Front
.The situation is less rosy on the public finance front. "Public deficits," Mr Gentiloni noted, "should decrease following the withdrawal of almost all energy support measures, but public debt is set to increase slightly next year, highlighting the need for budget consolidation. In Italy, public debt will rise again: from 137.3 per cent of GDP in 2023, to 138.6 per cent in 2024, to 141.7 per cent in 2025.
