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.
On May 8, 2025, the Verkhovna Rada of Ukraine ratified a strategic agreement with the United States of America on the joint use of mineral resources, which was an important step in strengthening the economic partnership between the two countries. The agreement provides for the creation of a Joint Reconstruction Investment Fund, which will give the US priority access to Ukrainian minerals, including lithium, titanium, graphite, and uranium. At the same time, Ukraine expects increased military support and economic stability.
Volodymyr Khaustov, scientific secretary of the State Institution “Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine,” honored economist of Ukraine, and candidate of technical sciences, shared his vision for the prospects of this agreement in a video from the Experts Club expert and analytical center.
“Ukraine has significant potential in the field of strategic mineral extraction. However, it should be understood that realizing this potential requires significant investment and time. Many deposits, particularly lithium deposits, are located in regions where infrastructure needs to be modernized and geological data is based on outdated Soviet research,” Khaustov said.
The expert also highlighted the technological challenges associated with the extraction and processing of Ukrainian minerals.
“Most lithium deposits in Ukraine contain ores that are difficult to enrich using existing technologies. This requires the development of new processing methods, which in turn requires time and financial resources,” he explained.
The agreement also stipulates that profits from joint projects will be reinvested in Ukraine during the first ten years, which should contribute to the country’s economic recovery. However, Khaustov warns against excessive optimism about quick results.
“The implementation of such large-scale projects is not a matter of one year. All risks and challenges, including geopolitical and economic ones, that may affect the implementation of the agreement must be taken into account,” he stressed.
Overall, the expert believes that the signing of the agreement with the US is an important step for Ukraine, opening up new opportunities for the development of the mining industry and strengthening the economy. However, the successful implementation of the agreements requires a comprehensive approach, strategic planning, and close cooperation between all interested parties.
“This is a chance for Ukraine to become an important player in the global market for strategic minerals. But this requires not only desire, but also real action, investment, and technological solutions,” Volodymyr Khaustov concluded.
Thus, the agreement between Ukraine and the US opens a new page in the economic partnership between the two countries, but its successful implementation depends on many factors that require careful analysis and balanced decisions.
You can learn more about Ukraine’s mineral resources in the video: https://www.youtube.com/watch?v=IFI5sUBX3gc&t
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Unlike most other EU countries, Spain’s economy is showing steady growth in 2025, despite external challenges and internal structural constraints.
Key macroeconomic indicators for 2025
GDP growth: According to the European Commission’s forecast, GDP is expected to increase by 2.3%.
Inflation: Inflation is expected to decline to 2.2%.
Unemployment rate: Unemployment is forecast to decline to 11.0%.
Budget deficit: The deficit is expected to fall to 2.6% of GDP.
Public debt: Debt is expected to fall to 101.3% of GDP.
Spain’s economic growth in 2025 is supported by the following factors:
Domestic demand: Increased consumer spending and investment are contributing to economic growth.
Tourism: The tourism sector continues to recover, contributing positively to GDP.
Investment: Improved financing conditions and the implementation of projects under the Recovery and Sustainability Plan are stimulating investment activity.
Risks and challenges
Despite the positive trends, certain risks remain:
Geopolitical instability: Trade tensions, particularly with the US, could have a negative impact on exports.
Political fragmentation: Domestic political instability could slow down the adoption of necessary economic reforms.
Structural problems: High unemployment, especially among young people, and low labor productivity remain pressing issues.
Forecast for the end of 2025
The Spanish economy is expected to continue growing, albeit at a more moderate pace. Key forecasts for the end of the year:
GDP growth: Around 2.3%.
Inflation: Decline to 2.0%.
Unemployment: Decline to 10.7%.
Thus, despite the existing challenges, the Spanish economy is demonstrating its ability to grow sustainably and adapt to changing conditions.
The Experts Club think tank has analyzed the state of the French economy and provided its forecasts for the whole of 2025. At the beginning of 2025, the French economy is showing signs of slowing down due to internal and external factors, including the escalation of trade disputes with the United States.
Current economic indicators
According to the National Institute of Statistics and Economic Studies (INSEE), France’s GDP grew by 0.1% in the first quarter of 2025 compared to the previous quarter, following a 0.1% decline in the fourth quarter of 2024. This modest growth was mainly driven by inventory accumulation in the chemical, pharmaceutical, and agro-industrial sectors, which added 0.5 percentage points to GDP. However, domestic demand remains weak, with consumer spending stagnating and business investment declining by 0.1%. Foreign trade also had a negative impact, reducing growth by 0.4 percentage points due to a 0.7% decline in exports and a 0.4% increase in imports.
Impact of US trade tariffs
The introduction of new tariffs by the administration of US President Donald Trump, including a 25% duty on cars, steel, and aluminum, is putting significant pressure on France’s export-oriented industries. Companies such as Airbus are looking for ways to circumvent these tariffs, for example by delivering aircraft to US airlines via third countries.
The French government has lowered its economic growth forecast for 2025 from 0.9% to 0.7%, citing uncertainty in global trade. The Bank of France has also confirmed this forecast, noting that growth remains positive but is slowing compared to previous years.
Forecast for the end of 2025
Economists expect France’s economic growth to remain weak in the second half of 2025, with a possible improvement in 2026. The main risk factors remain ongoing trade disputes with the US and domestic political uncertainties. However, France is committed to maintaining economic stability through fiscal measures and stimulating domestic demand.
In 2025, Germany’s economy continues to face serious challenges. After two consecutive years of GDP decline (0.3% in 2023 and 0.2% in 2024), the current year is characterized by stagnation, with GDP growth forecast at 0.0%. This makes Germany the only G7 country that has not shown economic growth in the last three years.
The new government led by Chancellor Friedrich Merz, who is due to take office on May 6, is expected to present a package of measures to stimulate the economy. These include
Economists predict a moderate recovery of the German economy in 2026 with GDP growth of around 1.0%. However, the successful implementation of these forecasts will depend on the new government’s ability to effectively address internal and external challenges.
In January-March 2025, the real gross domestic product (GDP) of Ukraine grew by 1.1% compared to the same period in 2024, according to the Monthly Economic Monitoring of the Institute for Economic Research and Policy Consulting (IER).
“The indicators for GDP, industry, construction and a number of other sectors of the economy published by the State Statistics Service allowed the IER experts to refine the estimate of real GDP growth in the first quarter of 2025. According to our estimates, real GDP grew by 1.2% in January and 0.7% in February,” the IER press service said on Tuesday.
It is noted that better access to electricity in March and a gradual increase in demand were the main reasons for a certain improvement in the economic situation in March. According to the IER, real GDP grew by 1.3% in March.
Value added in agriculture declined by about 3% y-o-y in March, which is in line with the revised estimate for February. The IER explained that this was mainly due to a decline in livestock production in households. As before, the advance of Russian troops led to a decrease in production near the front line.
“According to our estimates, real gross value added (GVA) in industry grew by 2.5% yoy in March, slightly faster than the revised 1.8% in February. Moderate growth in domestic demand and exports supported the increase in production, although Russian attacks continued to have a negative impact on economic activity. For example, in March, attacks on such major cities as Dnipro, Kryvyi Rih, and Kharkiv intensified,” the Institute added.
Production in the mining industry in March, according to the IER, decreased by more than 3% compared to March 2024, primarily due to the temporary occupation of several coal mines in Donetsk region by Russian troops and attacks on gas production. Real GVA in the electricity sector decreased by almost 5%, due to Russian attacks.
The IER emphasized that it also revised its estimate of growth in trade to 0.7% in February (compared to February-2024). The organization hopes that in March, growth will remain close to the same level – 1.2%.
“This will continue to reflect the trend of increasing the share of direct sales in trade, which leads to a decrease in wholesale turnover. According to our estimates, real GVA in transportation in March declined by 6%, which is close to our revised estimate for February. A deeper slowdown in rail freight transportation due to cyberattacks offset slightly faster growth in other transportation segments. The impact of the suspension of gas transit also remained,” the IER emphasized.
As for inflation, the IER estimates its growth at 14.6% yoy in March compared to 13.4% in February. One of the main factors behind this acceleration was a 45% increase in average egg prices compared to the low base of last year, while in February prices were close to last year’s levels (2% higher than in the previous year). However, inflationary pressures were also supported by traditional factors, such as rising labor costs, higher costs of stable energy supplies, last year’s poor harvest, and the approximation of domestic prices for a number of agricultural products to world prices (due to the removal of export barriers that previously kept domestic prices lower).
As reported, the NBU has downgraded its forecast for Ukraine’s economic growth this year to 3.1% from 3.6% in its previous January macroeconomic forecast, next year from 4.0% to 3.7%, and in 2027 from 4.2% to 3.9%.
According to First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko on March 18, gross domestic product (GDP) growth in January-February 2025 is estimated at 1.1%.
Earlier, on February 28, the International Monetary Fund (IMF) downgraded its forecast for Ukraine’s economic growth in 2025, lowering it by 0.5 percentage points (p.p.) from its previous forecast to 2-3%. Also, the European Bank for Reconstruction and Development (EBRD) has downgraded its forecasts for Ukrainian GDP growth in 2025 from 4.7% to 3.5%, the World Bank from 6.5% to 2%, and the National Bank of Ukraine from 4.1% to 3.6%, but the state budget for 2025 is based on a 2.7% GDP growth forecast.
In addition, ICU Investment Group has lowered its forecast for Ukraine’s GDP growth from 3.4% to 3% in 2025.
