Italy’s economy set to recover faster than expected

Italy PM Draghi credits covid vaccinations as key factor in recovery.

Italy's economy is set to bounce back stronger than expected, according to an updated economic forecast announced by premier Mario Draghi on Wednesday.

Italy's gross domestic product (GDP) is expected to increase by 6 per cent this year, higher than the initial budget figures projecting growth of 4.5 per cent. There is a 4.7 per cent increase in GDP forecast in 2022.

"The economic outlook is far better than what we ourselves thought it might be five months ago" - said Draghi - "Now there is confidence in Italy, among Italians and in the rest of the world."

The news comes after Italy's economy contracted by almost 9 per cent in 2020 due to the turmoil caused by covid-19 lockdowns.

Italy's deficit-to-GDP ratio is also better than expected, projected at 9.4 per cent this year and set to fall to 5.6 per cent in 2022, before falling to 3.9 per cent in 2023 and 3.3 per cent in 2024, reports news agency ANSA.

"The most important challenge is to make growth fair and sustainable, lasting, structural, at higher growth rates than those before the pandemic which were really very low and were at the root of the continuing economic crisis", said Draghi.

In addition to the boost provided by government interventions and strong exports, Draghi credited Italy's vaccination campaign as a key factor behind the nation's economic recovery, stressing that the covid vaccine "is the only sure way to protect ourselves and our loved ones."