Update macroeconomics and trends in Italy
Divergent Forecasts for Economic Growth
Forecasts for Italy’s GDP in 2025 remain uncertain. The Ministry of Economy and Finance (MEF) projects growth at 1 %, while the OECD has revised its estimate downward to 0,7 %. The Bank of Italy lowered its forecast to 0,6 %, referring to the possible impact of new 20 % US tariffs on EU goods.
These varying forecasts reflect economic fragility and external risk, even as the broader outlook remains cautiously growth-oriented (Omnicom, 2025).
The Ministry of Economy and Finance (MEF) projects growth at 1 %
Inflation and Price Stability recover Household Confidence
Core inflation stood at 1,6 % in early 2025. Falling energy prices and stabilized food costs have helped ease the high inflation levels experienced in 2022 and 2023.
This reduction has supported recovering household confidence and improved predictability for businesses in their decision-making processes.
Improved Household Consumption and Consumer Confidence
In Q1 2025, household consumption rose by 0,4 %, driven mainly by services like travel, leisure, and dining, while spending on packaged food and household goods fell by 0,1 %. The stable trend is supported by a 2,2 % rise in consumer confidence, reflecting improved expectations for employment and the economy.
However, only 19 % of households report saving regularly, and fewer feel able to make major purchases. Confidence is higher in the north than in the south.
Only 19 % of households report saving regularly, and fewer feel able to make major purchases.
Positive Trend in Labor Market
The Italian labor market continues its slow improvement. The employment rate increased from 61,6 % in December 2024 to 61,9 % in Q1 2025, while unemployment declined from 7,5 % to 7,2 %.
Growth in temporary dependent employment (+0,9 %) and female employment (+1,1 %) contributed to this trend. Additionally, a 1,2 % rise in total hours worked suggests longer contracts and greater work intensity.