The Italian economy is likely to recover from the pandemic faster than previously forecast, growing by as much as 6.4% this year, according to a study by Confindustria, the country’s federation of employers.
A strong third quarter should allow 2021 gross domestic product to increase by 6.3%-6.4%, the study showed, well above the official government forecast of 6%. That pace will be maintained, even as the fourth quarter slows because of a scarcity of raw materials and uncertainty over increasing virus cases, Confindustria said.
Italy was among the hardest hit by the pandemic, and the economy shrinks almost 9% last year.
Government support programs for businesses and families have enabled most enterprises to survive and return to growth, with both the Bank of Italy and the Finance Ministry recently saying expansion above 6% was likely in 2021.
The country should return to pre-Covid growth levels by the first quarter of 2022, the study showed. The economy has been boosted by increased consumption and there is still room for more spending by households from the savings accumulated during 2020 lockdowns, with consumer confidence rising and orders recovering, according to the federation.
The main obstacle to growth is rising energy prices, which erode company margins and reduce consumer spending, Confindustria said.