ROME, Nov. 29 (Xinhua) -- The Organization for Economic Cooperation and Development (OECD) forecast Wednesday that Italy's economy will grow by 0.7 percent this year and next, before expanding by 1.2 percent in 2025.
OECD's estimate for this year was in line with the prediction of both the Bank of Italy and Italy's National Institute of Statistics (ISTAT).
However, in its latest report, the Bank of Italy forecast the economy would grow 0.8 percent next year, and 1 percent in 2025. Meanwhile, ISTAT said a month ago that the economy could see its growth rate slow to 0.6 percent next year.
ISTAT data shows Italy's economy has failed to grow in three of the last four economic quarters. According to the most recent data, the third quarter of this year saw flat growth compared to the previous quarter.
Wednesday's OECD report said that Italy's economy was being held back because "low wage growth and high inflation have eroded real incomes, financial conditions have tightened, and most of the exceptional fiscal support related to the energy crisis has been withdrawn, weighing on private consumption and investment."
These factors, the OECD said, would only be partially offset by an anticipated decline in inflation, targeted tax cuts and increased public investment.
The OECD said that private consumption in Italy would decline from a 5 percent growth rate last year to 1.2 percent this year, 0.7 percent in 2024, and 1 percent in 2025. Government consumption will decline from 0.7 percent last year to contractions of 0.2 percent, 0.4 percent and 0.2 percent in 2023, 2024 and 2025, respectively, as the government seeks to reduce spending to curb budget deficits.
The report came out as ISTAT released the results of its November survey showing that business confidence declined to 103.4 points from 103.9 points in October. However, consumer confidence in November climbed to 103.6 points from 101.6.
Both confidence indicators use a 100-point baseline from 2010, adjusted upward or downward based on the responses to the ISTAT survey near the end of each month. Business and consumer confidence are considered important indicators of an economy's performance.
Also on Wednesday, ISTAT said that industrial producer prices in October were 1.5 percent higher than a month earlier, although they were still down compared to a year earlier. This data is a measure of the cost of doing business for the country's industrial sector.