ع
The Bank of Italy released updated macroeconomic projections on October 16 that raised its estimate for economic expansion this year. The central bank now sees GDP increasing by 0.9 percent in 2026 after adjustment for working days, rising to 1 percent on an unadjusted basis. Bank of Italy forecasts 1% GDP growth in 2026, matching the Italian government’s target in its Draft Budgetary Plan. This represents an improvement over the previous outlook.
The institution revised its 2026 growth projection upward by 0.4 percentage points from the June forecast. The adjustment reflects a less severe impact from the Middle East crisis in the early part of the year than previously expected. Favourable trends in investments tied to digital and energy transitions as well as strong summer tourism also contributed to the higher figure. Projections for subsequent years stand at 0.7 percent in 2027 and 0.8 percent in 2028.
Consumer price inflation is anticipated to climb to an average of 3.2 percent in 2026, propelled by the energy component, according to the Bank of Italy. The rate is then forecast to moderate to 2.4 percent in 2027 and 1.7 percent in 2028. Core inflation should remain close to 2 percent throughout the period. The projections are based on data available up to October 9.
Oil prices are assumed to average 114 dollars per barrel in the fourth quarter of this year while natural gas prices are seen at 76 euros per megawatt hour before both decline over the forecast horizon, the central bank stated. A favourable external demand environment is expected to aid economic activity in the coming periods. Planned government expenditure on defense and energy will provide additional support to growth in the biennium ahead.
Separate estimates from the International Monetary Fund, released in mid-October, project Italian GDP growth at 0.8 percent for the current year. The IMF also revised its 2027 outlook upward slightly to 0.6 percent. These figures underscore a cautiously optimistic view of the economy amid ongoing global risks from geopolitical tensions.
Economic output expanded by 0.2 percent in the second quarter, led by household consumption and investment, Bank of Italy figures show. Activity moderated somewhat during the summer amid higher energy costs and international uncertainties. Positive impulses came from sectors involved in the digital and energy transitions along with tourism, which helped offset some pressures.
