Roundup: Italy raises growth forecast for 2022, risks from Ukraine crisis still loom large
ROME, July 16– The Bank of Italy has raised its economic growth estimates for this year, but warned that the estimates could still be reduced dramatically if natural gas imports from Russia were cut off. Higher energy prices stemming from the ongoing conflict between Russia and Ukraine were major factors impacting both the growth and inflation data.
ROME, July 16 (Xinhua) — The Bank of Italy has raised its economic growth estimates for this year, but warned that the estimates could still be reduced dramatically if natural gas imports from Russia were cut off.
The bank on Friday predicted the economy would grow 3.2 percent this year, up from an estimate of 3 percent in its previous estimate from April. The new estimate was a dose of good news in Italy in a context of surging inflation.
On the same day, the National Institute of Statistics (ISTAT) confirmed earlier estimates showing that prices in June increased by 8 percent year-on-year, a new record high, and by 1.2 percent on a monthly basis.
Higher energy prices stemming from the ongoing conflict between Russia and Ukraine were major factors impacting both the growth and inflation data.
ISTAT said energy prices were 48.7 percent higher in June than a year ago, a bigger increase than in any other sector in the latest period. Economists have noted that high energy prices have a knock-on effect across the economy, raising prices for industrial production, agriculture, transportation and in other areas.
In its economic note, the bank said that while the crisis in Ukraine is already having an impact on the country’s growth prospects, the implications would be dire if Russia decided to cut off gas supply to Italy entirely. Earlier this week, Italian energy giant Eni said Russia’s Gazprom cut its gas delivery to Italy by a third.
The Bank of Italy said Friday that if the supply was cut off entirely, economic growth this year would increase by less than 1 percent, and such a move would also have a big impact on inflation.
Another factor weighing on the Italian economy, according to news reports, is political uncertainty. Olli Rehn, governor of the Bank of Finland, said that European Central Bank (ECB) was taking Italy’s political woes into consideration as it prepares for next week’s ECB policy meeting.
Rehn also said the energy crisis could hit Italy particularly hard due to the political situation. Enditem
ANA NEWS WIRE Disclaimer:
The African News Agency (ANA) is a news wire service and therefore subscribes to the highest standards of journalism as it relates to accuracy, fairness and impartiality.
ANA strives to provide accurate, well sourced and reliable information across Text, Images and Video. Where errors do appear, ANA will seek to correct these timeously and transparently.
The ANA platform also contains news and information from third party sources. ANA has sought to procure reliable content from trusted news sources but cannot be held responsible for the accuracy and opinions provided by such sources on the ANA platform or linked sites.
The content provided for on the ANA News Wire platform, both through the ANA news operation and via its third party sources, are for the sole use of authorised subscribers and partners. Unauthorised access to and usage of ANA content will be subject to legal steps. ANA reserves its rights in this regard.
ANA makes every effort to ensure that the website is up and running smoothly at all times, however ANA does not take responsibility for, and will not be held liable for times when the website is temporarily unavailable due to technical issues that are beyond our control.