+0.7 in 2024. Inflation falling to 1.8%

GDP expected at + 0.7% this year and acceleration to + 1.2% in 2025: the OECD once again confirms Italy’s economic growth forecasts. The estimates, contained in an interim update, are in line with those indicated in the Economic Outlook of November 29th, reiterated in the report on the Italian economy published by the Organization for Economic Development Cooperation on January 22nd.

Italy’s GDP +0.7% in 2024

Inflation forecasts revised downwards on Italy: after the 5.9% average for 2023, the cost of living is now expected to show a clear slowdown this year at 1.8%, while in 2025 it should record a slight rise to 2.2%. The estimates mark a cut of 0.8 percentage points on expected inflation for this year and of 0.1 percentage points on that of 2025. For underlying inflation, i.e. net of the prices of energy, food and other volatile goods , in Italy the OECD forecasts 2.4% this year (0.7 percentage points less than in November) and 2.2% in 2025 (0.3 percentage points less).

It will accelerate in 2025

At the same time, lens Parisian revised its economic growth forecasts downwards for the whole of the euro area, at 0.6% this year (0.3 percentage points less than in November) and 1.3% next year (0.2 percentage points less). For Germany, after a minus 0.1% of GDP in 2023, it estimates a plus 0.3% this year (0.3 percentage points less than November) and 1.1% next year (-0.1 points) . For France, 0.6% growth this year (-0.2 points less) and 1.2 the next (unchanged compared to November). The strongest growth expectation concerns Spain with 1.5% this year (plus 0.1 points) and plus 2% next year (unchanged figure).
Adjusted upwards this year’s global economic growth forecasts al 2.9% while he confirmed the expectation for 2025 at 3%.

Euro area, OECD numbers

Forecasts revised downwards inflation for the euro area average and after 5.4% in 2023, this year the cost of living should moderate to 2.6%, more than halved and 0.3 percentage points lower than the estimates of last November. Inflation estimated 2025 at 2.2%, in this case the downward adjustment was 0.1 percentage points. For underlying inflation, the OECD forecasts 2.6% this year (0.5 percentage points less than in November) and 2.2% the next (0.1 percentage points less).

Unknown Middle East

As for the attacks by Islamist militiamen Houthis to ships in the Red Sea”if persistent, could add up to 0.4 percentage points to price inflation in the OECD area by the end of the year.” This was stated by the secretary general of the Organization for Economic Co-operation and Development, Mathias Cormann, in the press conference presenting the interim Economic Outlook.
The inability to use the Suez passage, having to use the alternative route that rounds the Cape of Good Hope, OECD chief economist Clare Lombardelli noted, increases travel times for ships and oil tankers by 10-14 days. “THE costs they have doubled compared to the end of the year – he said – but remain below levels “that they had reached during the lockdowns imposed due to Covid”.