Italy's business lobby hikes forecast for Italian 2024 GDP growth

MILAN (Reuters) - Italy's main business lobby on Wednesday hiked its growth forecast for the country's economy this year thanks to improving global demand and expected interest rate cuts by the European Central Bank (ECB).

Confindustria said gross domestic product in the euro zone's third largest economy would grow by 0.9% in 2024, up from a 0.5% forecast last October, and then marginally accelerate to 1.1% in 2025.

If Italy can put to good use European post-pandemic recovery funds this will also provide a "strong and decisive" contribution to growth," it said in a statement.

The lobby said EU funds available to spend on investment and reforms should amount to 42 billion euros ($44.70 billion) this year and 58 billion in 2025, equivalent to roughly 2% of gross domestic product per year.

Its growth estimates are more upbeat than those of most domestic and international forecasters.

The latest projections by the European Commission and Italy's national statistics bureau ISTAT both foresee 0.7% growth this year, while the International Monetary Fund on Tuesday forecast 0.7% for both 2024 and 2025.

Among factors preventing more robust expansion, Confindustria cited the phasing out of fiscal incentives for home improvements, as well as global bottlenecks caused by international tensions.

The Italian government this month cut its own growth forecast for this year and next, but at 1.0% for 2024 and 1.2% for 2025 they remain above market consensus.

($1 = 0.9396 euros)

(Reporting by Cristina Carlevaro, editing by Gavin Jones)