ROME, June 7 (Reuters) – The Italian economy will grow just 0.3% this year, the Bank of Italy said on Friday, cutting an already reduced projection of 0.6% made in January due to weaker foreign demand and corporate uncertainty.

The government has forecast growth of 0.2 percent in 2019

The central bank said it expected gross domestic product (GDP) to grow 0.7% next year and 0.9% in 2021 against previous forecasts of 0.9% and 1.0% respectively. As recently as last December it was predicting GDP growth of 1.0% this year.

In its latest economic update, the bank said GDP expansion would be driven by consumer spending and exports while investments were expected to remain weak.

It added that its growth projections were subject to high risks due to trade tensions and the reaction of financial markets to Italy’s 2020 budget policies, which are under review. (Reporting by Valentina Za; Editing by Crispian Balmer)