Italy forecasts 0.6% GDP growth in 2025, 0.8% in 2026
Italy's economy is projected to expand by 0.6 per cent in 2025 and 0.8 per cent in 2026, following a cumulative 0.7 per cent rise over the previous two years, according to the latest forecasts.
The growth will be entirely fuelled by domestic demand excluding inventories, contributing 0.8 and 0.9 percentage points (pp) respectively, while net foreign demand is expected to drag growth down by 0.2 and 0.1 pp in each year.
Forecasts assume a gradual easing of uncertainty surrounding US trade policy in the second half of 2025, though global trade is still likely to face headwinds from tariff impacts, according to the official statistical agency Istat.
Private consumption is set to grow steadily by 0.7 per cent in both years, supported by rising wages and employment, though partially offset by an increased propensity to save. Investment growth will accelerate to 1.2 per cent in 2025—up from 0.5 per cent in 2024—because of a strong first quarter, but will likely stagnate in the second half before rebounding to 1.7 per cent in 2026 with the final implementation phase of Italy's National Recovery and Resilience Plan (NRRP).
Employment, measured in Full Time Equivalents (FTEs), is expected to rise faster than GDP, increasing by 1.1 per cent in 2025 and 1.2 per cent in 2026. The unemployment rate is projected to fall to 6.0 per cent in 2025 and 5.8 per cent in 2026.
Following an inflation spike in late 2024 and early 2025, price growth is anticipated to moderate, with the household spending deflator rising by 1.8 per cent in 2025 and easing to 1.6 per cent in 2026, aided by lower energy costs and weakening demand.
Italy's economy is forecast to grow 0.6 per cent in 2025 and 0.8 per cent in 2026, driven by domestic demand, as net exports weigh on growth. Consumption will rise 0.7 per cent yearly, with investment picking up to 1.2 per cent in 2025 and 1.7 per cent in 2026. Employment growth will outpace GDP, while inflation is set to ease to 1.8 per cent in 2025 and 1.6 per cent in 2026, per Istat.
Fibre2Fashion News Desk (HU)
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