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26 May 2023
Italy: Staff Concluding Statement of the 2023 Article IV Mission
The Italian economy grew robustly over the past year despite sharply higher energy prices. Generous tax credits for building refurbishment and strong tourism spurred growth to an impressive 3.7 percent in 2022, with a further expansion of 1.8 percent (year-on-year) in the first quarter of 2023. Downside risks were mitigated by extensive fiscal compensation to cushion households’ and firms’ real purchasing power, while a natural gas shortage was averted by securing replacement supplies, lowering gas demand, and a mild winter. Employment picked up strongly, with the unemployment rate falling sharply. The public debt ratio has declined by 10 percentage points from its peak in 2020 on the large rebound in nominal GDP. While the energy price spike has largely reversed, broadening price pressures have driven core inflation to high levels
