Italy GDP

Economic growth ebbs in the second quarter of 2026

GDP grows above market expectations: According to a preliminary estimate, Italy's GDP increased 0.2% in working-day and seasonally adjusted quarter-on-quarter terms in Q2, following 0.3% growth in the prior quarter and coming in above market expectations. On a year-on-year basis, GDP grew 1.0% in Q2, following 0.8% growth in the previous quarter.

Domestic demand drives growth: A full breakdown of GDP by expenditure will not be available until 1 September, but the statistical office said that domestic demand strengthened in Q2, while net exports weakened. Inventories likely rebounded, while fixed investment also likely improved. On the production side, output in the services sector increased, but decreased in the industrial and agricultural sectors.

Panelist insight: EIU analysts commented on the outlook: “We expect economic growth to remain relatively stable at 0.8% in 2026, supported by stable labour market conditions and EU-funded investment. However, the resumption of the military conflict in Iran presents downside risks to Italian growth in the second half of 2026 via higher energy costs and trade disruption.” ING’s Paolo Pizzoli commented on the outlook: “After today’s release, the statistical carryover for Italian GDP growth in 2026 is now 0.8%, which coincides with our current base case forecast for the year. Barring a substantial re-escalation on the Middle East front, our 0.8% estimate for average GDP growth in 2026 now looks slightly conservative.”

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