The Bank of Italy has cut growth forecasts for this year and next while pointing out the country's economy might have entered into a recession in the last quarter of 2018.
The Bank said on Friday through its quarterly economic bulletin that reduction in investment by companies as well as a sharp slowdown at the end of the year, have led it to cut its growth estimations for the country.
"The available cyclical indicators point to a possible decline in economic activity in the last three months of the year after the interruption in growth in the third quarter".
According to the financial institution, investments are expected to grow just by 0.6% this year from a 2.1% increase previously estimated. Household consumption's rise has also been reduced to 0.6% from the previous 1% rise forecast.
The Bank also announced it had lowered Italy's growth forecast in 2019 to 0.6% and 0.9% for 2020, down from prior estimates of 1% for this year and 1.1% for next year.
"The downward revision was on account of three main considerations: new information pointing to a sharper cyclical slowdown in the last part of 2018, which reduced the carry-over effect on growth by 0.2 points; the cutback in firms' investment plans, as confirmed by recent surveys; and the expected slowdown in global trade," the Bank said.