Italy GDP

Economic growth slows in the first quarter of 2026

GDP growth slows less than expected: According to a preliminary estimate, Italy's GDP expanded 0.2% in working-day and seasonally adjusted quarter-on-quarter terms in Q1, following a 0.3% expansion in the previous quarter. The slowdown was slightly less sharp than the market had expected. In annual terms, GDP increased 0.7% in Q1, following a 0.9% expansion in the prior quarter.

Net exports drive growth: A full breakdown of GDP by expenditure is not yet available, but the statistical office cited net exports as the main driver of growth; merchandise exports expanded more quickly than in the previous quarter, while services exports were likely lifted by tourism linked to the Winter Games held in February. In contrast, domestic demand weighed on momentum. On the production side, the statistics office indicated that stronger services activity underpinned growth, whereas value-added fell in agriculture, forestry and fishing, as well as in industry.

Panelist insight: On the outlook, ING’s Paolo Pizzoli commented: “Looking ahead, given the protracted deadlock in the Strait of Hormuz, prospects for the second quarter are of a further deceleration of GDP growth. We are currently anticipating a flat quarter; private consumption is likely to suffer the direct impact of rising inflation on household purchasing power, while gross fixed capital formation may prove more resilient thanks to a likely acceleration in infrastructural investment as the end-June deadline of the EU-funded national recovery plan approaches.”

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