The International Monetary Fund (IMF) in its World Economic Outlook report released on Tuesday, predicts that Italy will wrestle with a debt-to-GDP ratio above 140% for at least the next five years, reaching 140.1% in 2028. This year's debt burden is estimated to be 143.7%, surpassing Italian officials' previous estimates by over 3 percentage points. These projections factor in the fiscal plans of the Meloni government as outlined in the 2023 budget.
Sergio Nicoletti Altimari, a senior Bank of Italy official, expressed concerns about fiscal constraints, potential financial instability, and increased state borrowing costs due to high debts. The IMF attributes Italy's lowered growth forecasts of 0.7% for this year and the next to expired home renovations incentives and a weaker trade environment. This contrasts with improved debt figures in Germany and France.
Meanwhile, the IMF anticipates a positive shift in Ukraine's GDP growth to 2% by end-2023, marking a significant improvement from last year's -29.1%. The report projects further growth to 3.2% next year despite ongoing hostilities. The consumer price index is projected to decline from 20.2 in 2022 to 17.7 this year and further to 13.0 next year.
The current account balance will drop from 5.0 last year to -5.7 by the end of this year, while the unemployment rate is expected to decrease from 24.5 to 19.4 compared to last year. Despite the Russian invasion, signs of moderate recovery are evident in the Ukrainian economy due to a stable electricity supply and aid from Western partners. These projections align with the World Bank's forecast of a GDP growth of 3.5% this year.
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