MNI BRIEF: Italy Q3 GDP Flat, 2026 Tariff Hit - Budget Office

Italy’s economy likely stagnated in Q3, following a 0.1% contraction in Q2, the country’s Parliamentary Budget Office (UPB) said Friday, noting a weak export performance and subdued consumption amid a high savings rate.

UPB’s short-term models point to near-unchanged GDP compared to Q2, with only a gradual recovery expected toward year-end, warning that U.S. tariffs and euro appreciation will increasingly weigh on exporters over time, even as global trade has remained resilient.

The euro’s 13% appreciation against the dollar since the start of 2025, combined with higher import costs for U.S. buyers, represents an effective competitiveness loss of about 30 percentage points relative to 2024, the report said, citing downside risks on growth for 2026 due to trade fragmentation and soft domestic demand.