“A modest 1% growth rate represents a lot compared with Germany,” Giancarlo Giorgetti said at an event in Rome on Saturday, confirming an earlier Bloomberg News report. Corriere della Sera reported Giorgetti’s comments earlier on Sunday.

The new estimate, slightly lower than the current forecast, will be included in a revised economic outlook being prepared by Giorgetti and Prime Minister Giorgia Meloni, to be released in April. 

The forecast compares with the 1.2% rate included in Meloni’s budget unveiled in September but would still mark a small increase from 0.9% growth in 2023. The current median forecast of economists surveyed by Bloomberg is for the expansion to slow to 0.6% this year. 

Growth is being fuelled by momentum carrying over from the final months of 2023, gains in consumer spending, and faster cash flow from the European Union’s Recovery Fund, people familiar with the matter have said.

Italian households are slowly recovering purchasing power despite the economy having taken a hit from the phasing out of fiscal incentives, the people added.   

Analysts say Germany is probably in a recession after its economy contracted in the final three months of 2023 and, they predict, the first quarter of this year. The French economy will expand 0.7% in 2024, according to a Bloomberg News survey.