Italy’s economic outlook is rosier. International ratings agency Moody’s has upgraded its GDP growth forecast for Italy in 2023, up from -1.4% to +0.3%. The revision, it explained in its Global Macro Outlook, reflects lower risks of short-term energy shortages and the recent decline in energy prices.
- That’s in line with the outlook of Confindustria’s Study Centre, which forecasts a more optimistic +0.6%. Record-breaking exports are also contributing to keeping the Italian economy afloat.
- Year-on-year inflation is also expected to fall to 3.3%% in December, compared to +12.3% in December 2022 with respect to the previous year.
Same goes for the eurozone. As fears of a severe energy shock are decreasing across the Euro area, Moody’s analysts raised their GDP growth estimates to +0.5%. Still, energy self-sufficiency in the second half of 2023 and 2024 remains the main uncertainty factor: although the industrial sector has held up well, constraints on energy supply will remain an obstacle to growth.
- The rating agency believes central banks will keep interest rates in restrictive territory for longer than financial markets expect, despite the latter’s sense that rate tightening should end soon so as not to frustrate the past months’ efforts.