The negative effect on the product of theUS tariff increase in the three-year period 2025-27 penalizes the investments and overseas sales and subtracts from the growth of the product approximately 0,5 percentage points overall. They are the macroeconomic projections for Italy in the three-year period 2025-27 developed by the experts of Bankitalia within the framework of the coordinated exercise of the Eurosystem.
A stronger tightening of trade policies and the persistence of uncertainty at high levels could determine more unfavorable developments. In particular, Bankitalia specifies, if duties were to return to the levels announced on April 2, growth would be lower by about two tenths of a percentage point this year and up to half a point per year in the next two years compared to that forecast in the baseline scenario.
Bankitalia, GDP estimates
Bank of Italy confirms the GDP estimate released in April: +0,6% in 2025, + 0,8% in 2026 e +0,7 in 2027, mainly driven by the consumption recovery. The increase in duties and uncertainty would instead penalize investments and sales abroad, subtracting about 0,5 percentage points from GDP growth overall in the three-year period 2025-27. The estimates assume a 10% increase in US duties on EU goods, but if they were to return to the levels announced on April 2, growth would be lower by about two tenths of a point in 2025 and up to half a point in the next two years.
According to Bankitalia, GDP will increase marginally in the current quarter and in the summer, held back by the direct and indirect effects of duties, and to a slightly more sustained extent later, benefiting above all from the favourable trend in consumption which should continue to expand, supported by the good performance of households’ purchasing power and the reduction in interest rates.
– investments would braked from the high uncertainty and the reduction of incentives for residential construction, but would benefit from the projects related to the PNRR and the gradual reduction of financing costs. Exports would decline in the current year and would only start expanding again next year, but less than foreign demand weighted by destination markets due to the loss of competitiveness induced by the appreciation of the exchange rate. Imports would grow more, especially this year, supported by the resilience of domestic demand.
Employment would continue to grow, but at a slower pace than output. This would result in a slight recovery in labor productivity. The unemployment rate would decline marginally to 6% in 2027. As for inflation, it would average 1,5% this year and next.
Bankitalia, inflation estimates
THEconsumer inflation is equal to 1,5 percent on average in both 2025 and 2026 and to 2,0 in 2027.
Excluding energy and food, inflation is 1,8 percent in the current year and 1,6 in each of the two subsequent years. The Bank of Italy’s projections, as agreed within the Eurosystem, are based on information available on 14 May for the formulation of technical assumptions and on 20 May for economic data.