Overview

• The European Commission downgraded Italy’s GDP growth projections for 2025 and 2026 by 0.3 percentage points, now forecasting 0.7% and 0.9% growth, respectively.
• Italy is projected to have the slowest growth rate in the EU in 2026, tied with Belgium, reflecting ongoing structural productivity challenges.
• Italy’s debt-to-GDP ratio is expected to rise to 138.2% by 2026, despite a gradual reduction in its budget deficit to 2.9%.
• The Commission emphasized the need for Italy to accelerate the use of Recovery Fund resources and implement reforms to boost competitiveness and public investment.
• US trade tensions, including tariffs on EU goods, are adding uncertainty and weighing on Italy’s trade-exposed economy, further impacting its growth outlook.