The Italian economy will grow by 0.5% this year and 0.7% in 2026 driven by consumer spending and investments, in line with the government’s latest estimates, the country’s central bank said on Friday, confirming forecasts made in October.
The report’s forecasting scenario takes into account developments in trade policies in recent months and the resulting reduction in uncertainty, the bank said in a note accompanying estimates made for the European Central Bank.
Italy’s exports should be affected by higher U.S. trade tariffs until the end of 2026 and return to growth in line with global foreign demand over the following two years, it said.
However, the central bank underlined that its projections remain “subject to a high degree of uncertainty, linked above all to international developments”.
Italy’s GDP growth, which came in at 0.1% in the July-September period, “is estimated to pick up slightly starting from the current quarter, driven by domestic demand”, the Bank of Italy said in its report.
The Bank of Italy slightly revised up its forecast for economic growth in 2027, to 0.8% from 0.7% estimated in October, and projected a 0.7% rate for 2028.
Turning to prices, Italy’s average EU-harmonised consumer price inflation rate should come in this year at 1.7%, unchanged from the previous forecast, the report said. The inflation rate for 2026 was marginally revised down to 1.4%.