EC Cuts Italian Growth Forecast to 0.7% in 2025

Brussels: The European Commission announced a revision of its growth forecasts for Italy, predicting a growth rate of 0.7% for 2025, a decrease from the previous estimate of 1%. The forecast for 2026 was also adjusted downward, from 1.2% to 0.9%.

According to Ansa News Agency, the European Commission indicated that the anticipated economic expansion in Italy will primarily be driven by domestic demand, with significant contributions from investments linked to the Recovery and Resilience Facility (RRF). This suggests a reliance on RRF-related spending to stimulate growth.

Inflation in Italy is expected to remain below 2% for both 2025 and 2026. This forecast is attributed to the negative dynamics of import prices and modest increases in domestic costs. Despite these economic conditions, the Italian government deficit is projected to decrease, falling from 3.4% of GDP in 2024 to 3.3% in 2025, and further down to 2.9% in 2026.

However, the debt ratio is anticipated to rise during the same period, influenced b
y the lingering effects of tax credits for housing renovations, which were accounted for in the deficit up until 2023.