Rome, Dec 19 | Italy’s gross domestic product (GDP) is projected to gain 0.3 percentage point growth in 2021 as a result of its use of the first tranche of the European Union (EU) recovery fund, according to a think tank.
Rome will receive 209 billion euros ($255.8 billion) from the Next Generation EU instrument, which will provide a total of 750 billion euros to the member countries of the bloc most impacted by the coronavirus emergency, reports Xinhua news agency.
“Next Generation EU will boost (Italy’s) growth by 0.3 percentage points in 2021, with a cumulative positive impact of 1.2 percentage points on GDP at the end of 2023,” the Prometeia tink tank said in its December Outlook released on Friday.
Of the 209 billion euros available to Italy, some 24.9 billion euros are planned to be used next year, according to the report, which stressed that ensuring “an efficient and effective” use of such resources will be “the country’s key challenge in the years to come”.
On the one hand, Prometeia analysts explained, the investment projects must aim at overcoming Italy’s long-term structural limits, starting with productivity.
On the other hand, the implementation of such projects would be a crucial test in terms of complexity, time and amount.
According to the Italian government’s national recovery plan, “public investments will reach 3.4 per cent of the GDP in 2023 compared to 2.2 per cent in recent years”, Prometeia said.
Despite the ongoing pandemic, Italy’s economy — the eurozone’s third largest — showed good resilience in the third quarter of 2020 and will rebound by 4.8 per cent in 2021, the report said.
Prometeia is a major think tank based in Bologna. It contributes economic analyses and forecasts to private and public entities, including the Italian Trade Agency (ICE) and the Ministries of Economic Development and Foreign Affairs.
In its latest outlook published in early December, the National Institute of Statistics (ISTAT) projected the Italian economy to grow by 4 per cent in 2021.
The Bank of Italy forecast a 3.5 per cent annual growth.