ITALY: Bank of Italy Leaves 2025 and 2026 GDP Forecasts Unchanged

The Bank of Italy’s 2025 and 2026 domestic GDP forecasts were left unchanged at 0.6% and 0.8% respectively. In its latest Economic Bulletin, the Bank notes that “the forecasting scenario is subject to considerable uncertainty, mainly linked to how geopolitical and trade tensions evolve”.

• “According to our estimates, GDP rose again in the second quarter of 2025, though at a slower pace than in the previous period. Value added grew both in industry and in services”.
• “In the second quarter, industrial production and activity in services grew slightly. The construction sector continued to expand, albeit more moderately, thanks to the resilience of the non-residential sector. Investment also slowed, reflecting high uncertainty and low capacity utilization in manufacturing. Against a backdrop of high geopolitical instability and persistent trade tensions, the outlook remains uncertain”.
• “The latest indicators suggest that consumption rose at similar rates in the spring months as well, driven by the growth in employment and in real wages. Consumer confidence, however, was affected by global uncertainty, which kept the propensity to save at high levels”.
• “Headcount employment continued to rise in the second quarter, albeit at a more modest pace. Growth in contractual wages remained robust in the non-farm private sector, though it weakened slightly in the spring months”.
• “According to our estimates, sales to the United States declined sharply in April and May, contributing to the fall in overall goods exports”