2025 is expected to be the third consecutive year of weak growth since the strong post-Covid recovery. Although the effects of the inflationary shock are starting to dissipate, with inflation under control, a more expansionary monetary policy and an upturn in household consumption, headwinds are likely to continue to penalise activity, with GDP expected to rise by only 0.6% after 0.5% in 2024. With domestic demand strengthening, the uncertain international environment continues to undermine confidence.

The war in Ukraine and tensions in the Middle East continue to fuel geopolitical pressures, while the US tariff policy, with increased import taxes also affecting Europe, will impact global trade flows. In Italy, exports remain fragile, affected by high energy costs and sluggish demand in key sectors such as metals and automotive, which should continue to impact an industrial cycle that is just showing signs of stabilisation. At the same time, investments, although benefiting from monetary easing, will remain held back by still high interest rates, altered demand prospects and a construction sector that will have to cope with the setback of the Superbonus.

Despite these constraints, public finances are beginning to consolidate, with a projected deficit of 3.3% of GDP, underpinned by budgetary discipline in line with the new European rules.