MILAN (Reuters) – The International Monetary Fund on Thursday slightly improved its growth estimates for Italy in 2021 and 2022 while increasing projections for the country’s budget deficit.
The IMF now sees Italy’s gross domestic product up 4.3% and 4% in 2021 and 2022 respectively, from an April estimate of 4.2% and 3.6%, closer to the government’s projections of growth of 4.5% this year and 4.8% next year.
The budget deficit for 2021 was revised up to 11.8% of GDP from 8.8% in April, matching the government’s estimate. The budget deficit for 2022 was seen at 6% in 2022 from 5.5%, near Rome’s projection of 5.9%.
Italy’s economy grew by 0.1% in the first quarter from the previous three months due to higher investments and inventories, national statistics bureau ISTAT said on Tuesday, sharply raising a preliminary estimate of -0.4%.
The unusually strong revisions, which took the country out of recession, increase the possibility that Mario Draghi’s government can reach its full year growth forecast of 4.5%, following a 8.9% collapse last year when the economy was hobbled by coronavirus lockdowns.
(Reporting by Maria Pia Quaglia; Editing by Alison Williams)
