Italy’s economy in 2025 is showing moderate growth amid structural problems and external economic challenges. Despite positive trends at the beginning of the year, the outlook for the rest of the year remains uncertain.
Key macroeconomic indicators for 2025
GDP growth: According to the European Commission’s forecast, GDP is expected to increase by 1.0% in 2025.
Inflation: Inflation is expected to rise moderately to 2.3%.
Unemployment rate: Unemployment is expected to fall to 7.7%.
Budget deficit: The deficit is projected to narrow to 3.3% of GDP.
Public debt: Public debt is expected to rise to 137.8% of GDP by 2026.
Economic dynamics in January-April 2025
Industrial production: In March 2025, industrial production increased by 0.1% compared to February, which is below the expected growth of 0.5%. In annual terms, production fell by 1.8%, continuing the downward trend for 26 months.
GDP growth in Q1: Italy’s economy grew by 0.3% in the first quarter of 2025, slightly exceeding analysts’ expectations. Factors supporting the economy
Domestic demand: Private consumption is expected to strengthen, becoming the main driver of economic growth in 2025.
Fiscal policy: The Italian government has approved a budget for 2025 that includes tax breaks for families and deficit reduction, which should stimulate economic activity.
Risks and challenges
External factors: Potential trade tensions, particularly with the US, could negatively affect exports and overall economic growth.
Structural problems: High public debt and the need for structural reforms remain key challenges for the Italian economy.
Forecast for the end of 2025
GDP growth: Growth of around 1.0% is expected, with domestic demand remaining the main driver.
Inflation: Inflation is expected to remain at 2.3%, in line with the European Central Bank’s target.
Unemployment: The unemployment rate is projected to decline to 7.7%, reflecting a gradual improvement in the labor market.
Thus, despite the existing challenges, Italy’s economy is showing signs of stabilization in 2025, supported by domestic demand and government support measures. However, further structural reforms and the effective use of available resources are necessary to ensure sustainable growth.
