Italy’s business lobby lowered its 2023 economic growth forecast to zero on energy concerns

MILAN, Oct 8 (Reuters) – Italy’s economy will grow more than expected in 2022 but stagnate in 2023, the country’s main chamber of commerce said on Saturday, warning that tensions over gas supplies between the European Union and Russia made the outlook very uncertain. .

In its report, Confindustria lowered its forecast for GDP growth to zero in 2023, from 1.6% forecast in April, and revised its forecast for 2022 to 3.4%, reflecting the Italian economy’s good performance in the first half.

The 2023 decline echoes government forecasts and comes after Mario Draghi’s outgoing administration last week lowered its growth forecast for next year to 0.6% due to higher energy costs. Still, it said GDP would grow 3.3 percent in 2022, up from a forecast of 3.1 percent in April.

The lower forecasts for next year highlight the economic headwinds facing Georgia Meloni, who led a right-wing coalition in last month’s election and is expected to be appointed prime minister this month.

“If the conflict between the EU and Russia escalates to the point of further inflation and/or blocking of gas supplies, the negative impact on production activity will be more severe, indicating a more pronounced recession,” Confindustria said in its report.

Several European countries, including Moscow and Germany, have been at loggerheads over Russian natural gas supplies since the country invaded Ukraine in February.

Russian gas now accounts for only 10 percent of Italy’s gas imports, down from 40 percent, while the share from Algeria and the Nordics has increased.

Reporting by Gianluca Semeraro; Editing by David Holmes

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