Italy slashes GDP growth estimates for 2022, 2023

Italy on Wednesday slashed its gross domestic product (GDP) growth forecast for this year and next year, with the Russia-Ukraine conflict acting as a drag on economic growth.

The country's economy is expected to grow 3.1 percent in 2022, compared to 4.7 percent based on previous estimate, according to a press briefing from Italian Prime Minister Mario Draghi and Economy and Finance Minister Daniele Franco.

For 2023, the government expects a growth rate of 2.4 percent, down from a previous target of 2.8 percent.

According to Franco, the government expects the budget deficit to be 5.6 percent of the country's GDP this year, while government debt is targeted at 147 percent of GDP. Italy remains one of Europe's most indebted nations in GDP terms.

Franco said that while Russia accounts for just 1.5 percent of Italy's total exports, the Russia-Ukraine conflict is having an oversized impact on Italy's economic growth because of indirect factors, such as higher energy prices and supply chain issues.