Italy's economy in late 2025 shows weak growth
(around 0.4-0.6% for 2025), with forecasts indicating slow recovery, hurt
by global uncertainty, tariffs, and lagging net exports, despite some internal
demand and positive labor market signs; long-term concerns remain around high
public debt and structural issues like skills gaps.
Key Points for December 2025:
- Low
GDP Growth: Forecasts hover around 0.4-0.6% for 2025, with
limited momentum expected into 2026.
- External
Headwinds: Global trade tensions, new tariffs (especially on US
trade), and reduced demand from partners are hurting Italian exports.
- Domestic
Demand Support: Growth relies on domestic spending, particularly
investment, partly driven by EU recovery funds (RRF).
- Labor
Market Mixed: Employment is rising, but wage growth and hours per
worker are weak, and skills shortages persist.
- Public
Finances: Debt remains high (around 137% of GDP by 2027), and
debt servicing costs are a concern, though deficits are projected to fall.
- Inflation: Remains
subdued, helping consumer purchasing power, but rising energy costs (ETS2)
might push it up later.
Major Concerns:
- High
Debt: Italy's large public debt-to-GDP ratio poses systemic
risks.
- Productivity
& Structural Issues: Falling productivity and regional
economic disparities (North-South divide) are persistent problems.
- External
Shocks: Vulnerability to international trade disputes and
economic slowdowns.
In essence, Italy's economy is experiencing fragile, slow growth, with forecasts suggesting minimal improvement, struggling against global headwinds despite some positive domestic trends.
https://www.istat.it/en/press-release/italys-economic-outlook-2025-2026-2/
so check https://youngdip.blogspot.com/2025/09/italian-economic-diplomacy.html
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