There will not be another black swan, this is the unpredictable event that can change the course of events. In short, the economy is moving towards normality. Which, therefore, also means a return to the rules of the Stability Pact. “I don’t expect more black swans”, not least because “enough is enough”, so the general safeguard clause, which suspended the stability pact in 2020, “will be reasonably deactivated at the end of the year”, said the commissioner to the Economy Paolo Gentiloni, at a press conference in Brussels presenting the European Commission’s winter estimates. Which confirms good news for the country. Italy’s GDP is now growing by 0.8% in 2023 and 1% in 2024 (autumn forecasts called for growth of 0.3% in 2023 and 1.1% in 2024), while inflation is forecast at 6.1 % this year, to then fall to 2.6% in 2024. As regards the Old Continent as a whole, the growth forecast by the interim winter forecasts for 2023 is 0.8% in the EU and 0.9% in the euro zone , respectively 0.5 and 0.6 percentage points above the autumn forecast. The growth rate for 2024 remains unchanged, at 1.6% and 1.5%, respectively, for the EU and the eurozone.
At the end of the forecast horizon, production volume is expected to exceed the autumn forecast by nearly 1%. After peaking in 2022, inflation will decline: «Three consecutive months of moderation in global inflation – explains the Commission – suggest that the peak is already behind us, as anticipated in the autumn forecasts. After hitting an all-time high of 10.6% in October, inflation has eased, with the January flash estimate falling to 8.5% in the eurozone. The drop was mainly driven by the drop in energy inflation. The inflation forecast was slightly revised downwards compared to the autumn, mainly reflecting the evolution of the energy market. Nominal inflation is expected to fall from 9.2% in 2022 to 6.4% in 2023 and 2.8% in 2024 in the EU. In the euro zone, a slowdown is expected from 8.4% in 2022 to 5.6% in 2023 and 2.5% in 2024.
“The good news is that the EU economy is entering a better-than-expected pace this year and looks set to escape recession,” Gentiloni said. “Since the fall, we’ve seen a number of positive developments,” he added. The Italian economy, after a “marginal” contraction in the fourth quarter of 2022, should “gradually recover” throughout 2023 and should be able to “avoid a technical recession”, that is, two consecutive quarters with negative GDP growth, he said. commented Gentiloni.
Source: IL Tempo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
