Italy's economy will develop slowly in 2023, according to the central bank.

The country's economic expansion is expected to quicken up after 2023, according to an upwardly revised prediction from the central bank of Italy, which was raised to 0.6 percent on Friday.

With oil costs on the decline and morale in Europe's leading nations rising, the change from an earlier estimate of 0.4 percent comes amid growing optimism that recessions may be avoided.

The adjustment aligns the Bank of Italy's forecast with that of Prime Minister Giorgia Meloni's far-right government in Italy.

The bank also increased its projection for growth in 2022 from 3.8 percent to 3.9 percent, despite the fact that it saw a decline in economic activity in the last quarter of the year.

According to the central bank, this was because of "consistently high energy prices and the sluggish recovery of the pandemic-affected sectors, including as trade, transportation, and lodging services."

Due to the ongoing conflict in Ukraine, the Bank of Italy issued a warning that its projections were made with "high uncertainty."

However, "it is predicted that war-related tensions would still stay high in the first months of 2023 and progressively diminish throughout the prediction horizon," the report added.

The central bank predicted that Italy's GDP will grow by 1.2 percent in 2024 and 2025, helped by both exports and domestic consumption.

According to the bank, inflation, which increased to an annual average of 8.7 percent last year, could drop to 6.5 percent this year and then continue to decline. Inflation of 2.0% was predicted for 2025.

After declining by 9 percent in 2020 owing to the Covid-19 outbreak, Italy's economy grew at an unprecedented pace of 6.7 percent in 2021.

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© AFP / Wanted in Rome