Overview

• The Bank of Italy projects GDP will expand by 0.6% in 2025, 0.8% in 2026 and 0.7% in 2027 under its baseline assumptions.
• Forecasts assume a 10-point rise in US tariffs on EU goods and estimate this will shave 0.5 percentage points off cumulative growth over the 2025–27 period.
• Inflation is expected to hold at 1.5% in both 2025 and 2026 before rising to 2.0% in 2027, and the unemployment rate is forecast to edge down to 6% by 2027.
• High uncertainty and cuts to residential construction incentives are set to temper investment despite support from EU recovery funds and easing financing costs.
• Exports are seen declining in 2025 with a rebound beginning in 2026, and the current account surplus is projected to remain around 1% of GDP.