Italy 2026 Growth Doubled to 1% by Confindustria

Italy's main business lobby Confindustria doubled its economic growth forecast for 2026 to 1.0%, up from a previous 0.5% estimate made in March. The upward revision signals near-term resilience, though economists warn that the momentum will fade as temporary fiscal stimulus measures expire.

Inflation Revisions and Fiscal Projections

Along with the higher growth output, Confindustria sharply hiked its forecast for Italy's 2026 average inflation rate to 3.2%, compared to its prior 2.5% projection. Inflation is subsequently expected to ease downward to 2.2% by 2027.

On the public finance front, the business lobby projects Italy's 2026 budget deficit-to-gross domestic product ratio will land at 2.9%. This fiscal target aligns closely with the official trajectory set by Prime Minister Giorgia Meloni's government.

The 2027 Slowdown and PNRR Expiration

Economic growth is projected to slow to 0.6% in 2027. This deceleration is attributed to the winding down of the European Union's post-COVID-19 National Recovery and Resilience Plan (PNRR) funds, which have served as a vital pillar for capital investment and infrastructure spending across the country.

Additional headwinds facing the Italian economy heading into 2027 include the recent rise in global oil prices, along with persistent pressures from higher interest rates and elevated consumer price inflation.