The Bank of Italy has indicated that Italy's economic output likely grew in the first quarter of 2023, thanks to eased energy costs. This would be an improvement from a decline of 0.1% in gross domestic product (GDP) in the last quarter of 2022. The central bank's quarterly economic bulletin, published on Friday, stated that their models based on extensive data suggest a rebound in GDP due to falling energy prices and improved supply conditions along value chains. It also highlighted that the service sector remained resilient, while construction and manufacturing showed growth.

The better-than-expected growth in Italy's economy is expected to be reflected in the new budget draft to be discussed by Premier Giorgia Meloni's cabinet in the upcoming week. The government is likely to revise its growth forecast for 2023 upward from the previous estimate of 0.6% to 0.9%, according to insiders. The report from the Bank of Italy also highlighted that Italian banks have strengthened their balance sheets in recent years, positioning them well to cope with the current challenging financial conditions. The impact of bank failures in the US and Switzerland has been in line with that experienced in other European countries and is overall limited, with low non-performing loan rates and increasing capital ratios and profitability for significant banking groups.

Source:
https://www.bnnbloomberg.ca/bank-of-italy-says-economy-likely-rebounded-in-first-quarter-1.1905768