Italian growth outlook brightens but slowdown ahead, business lobby says

ROME, Oct 14 (Reuters) — Italy's economy will grow by 1% this year, the country's main business lobby Confindustria forecast on Wednesday, hiking a previous 0.5% estimate made in March but warning that a renewed slowdown is expected in 2027. The improved outlook this year is thanks in large measure to European Union post-COVID-19 funds (PNRR) which have boosted investments and ensured firmer-than-expected growth in the first two quarters, Confindustria said in its twice-yearly report. It said turmoil in the Middle East had driven up global oil prices by less than expected In Italy, the pass-through from energy costs to prices of other goods and services has been weaker than feared However, quarterly growth in the second half of the year will be weak Growth will slow to 0.6% in 2027 due to the end of the PNRR, the recent rise in oil prices, and higher inflation and interest rates Confindustria's 2026 growth forecast of 1% is in line with that of Giorgia Meloni's government. For 2027 the government forecasts 0.8% Growth last year came in at 0.6% Confindustria forecast the 2026 budget deficit-to-gross domestic product ratio at 2.9%, in line with the government It sharply hiked its for