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IMF optimistic, Italy will do better than expected

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According to the updated estimates of the International Monetary Fund (IMF) the growth prospects of the Italian GDP are less pessimistic than a few months ago.

Despite a slowdown in growth compared to 2022 the IMF, led by Kristalina Georgievaraised its estimates by global growth for 2023 al +2,9%.

Despite an economy more resilient than expected, the Fund is not hiding that however, the risks are oriented to the downside. Among these is a possible stalemate in China but also an escalation of the war in Ukraine e high inflation for an extended period. One of the greatest dangers – the IMF reiterates, which has been worried about it for months – is the geopolitical fragmentation.

“The war in Ukraine and sanctions on Russia are dividing the global economy into blocs and reinforcing geopolitical tensions, such as those associated with the US-China trade dispute,” the Fund points out, explaining that the costs of fragmentation are particularly high in the short term. In addition to rejecting fragmentation, for the IMF it is necessary, looking ahead, to ensure financial stability: the risks – observe the aspects – remain high as does volatility on the markets.

IMF, in 2023 Italy will grow by 0.6%

The estimates revised upwards also include Italy, with the Belpaese’s GDP estimated to grow by 0.6% in 2023, i.e. 0.8 percentage points higher than the October estimates. Even better than expected Germaniawith a growth of 0,1% thanks to a revision equal to (+0.4 points), to then accelerate in 2024 to 1.4%. On the other hand, the prospects for the United Kingdomwhich turns out to be the rear of the G7 with a GDP expected to fall by 0.6% in 2023.

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“The rise in interest rates by central banks and the war in Ukraine continue to weigh on economic activity”, says the IMF illustrating the update of the World Economic Outlook. “Despite this, the outlook is less gloomy than in October“, continue the economists the “battle” against inflation “isn’t won yet“.

And therefore the Washington institute invites the central banks to continue with their “efforts” to combat the increase in prices, because even if they are slowing down, they remain still higher than the pre-pandemic levels. Global inflation is expected to decline from8,8% from 2022 to 6,6% of 2023 and al 4,3% of 2024with prices in advanced economies falling to 4.6% this year and 2.6% in 2024.

Regarding l’Eurozonethe expectation is growth of 0,7% this year (20 bp higher than expected in October) and 1.6% in 2024 (20 bp over October).

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