Italy's Narrow Escape from Recession Amidst Economic Challenges

November 2023, - Italy narrowly avoided a recession in the third quarter of 2023 with a revised annualized GDP growth of 0.1%, recovering from a 0.4% contraction in the previous quarter. The year-on-year GDP variation also stands at 0.1%, exceeding initial flat estimates. Despite this, both consumer and business confidence declined in October, reflecting broader economic concerns. The Italian manufacturing sector continues to contract, with the Purchasing Managers' Index falling to 44.4 points in November, marking eight consecutive months of contraction. Italy's annual inflation rate decreased to 0.8% in November, the lowest since March 2021. The Italian government revised its 2024 GDP growth forecast from 1.5% to 1.0%, with a budget deficit expected to rise to 4.3% of GDP.