The EU: weak development in Italy and public debt set to extend, Greece and Portugal higher | EUROtoday

Listen to the audio model of the article

BRUSSELS – The spring financial forecasts that the European Commission printed in the present day, Wednesday 15 May, are comparatively optimistic. The group govt is aiming for a gradual restoration of exercise, after a very weak 2023. On the Italian entrance, regardless of an enchancment within the state of affairs, public debt is destined to extend once more, whereas the decline is predicted to proceed in two different significantly indebted international locations, Greece and Portugal.

«The financial system recorded a transparent restoration within the first quarter, confirming that we have now turned the web page after a really difficult interval – defined the commissioner for financial affairs Paolo Gentiloni -. We count on development to progressively speed up this 12 months and subsequent, as personal consumption is supported by falling inflation, a restoration in buying energy and continued employment development.”

GDP expected +0.8% in 2024 in the euro area

According to the European Commission, the eurozone's gross domestic product is expected to grow by 0.8% in 2024 and 1.4% in 2025, compared to 0.4% last year. Compared to the February estimates, the changes are very limited (then the forecasts stood at 0.8 and 1.5% respectively). Italy continues to be marked by weak growth. Again according to the community executive, the economy should grow by 0.9% this year and 1.1% last year.

On the consumer price front, the Commission notes a decline in inflation. From its peak in October 2022, when it stood at 10.6% per year, inflation in the euro area fluctuated around 2.4% in April. «Inflation – we read in the EU executive report – is expected to continue to decline and will reach the target slightly earlier in 2025 compared to the winter forecasts», published in February. In Italy inflation will be 1.6% in 2024 and 1.9% in 2025.

The public finance front

The state of affairs is much less rosy on the general public funds entrance. «Public deficits – noticed Commissioner Gentiloni – ought to lower following the withdrawal of just about all vitality help measures, however public debt is destined to extend barely subsequent 12 months, highlighting the necessity for price range consolidation ». In Italy, public debt will rise once more: from 137.3% of GDP in 2023, to 138.6% in 2024, to 141.7% in 2025.