“Given the very small share of contracts awaiting renewal, A significant increase in wages in 2026 currently appears unlikely to recover the rise in inflation generated by conflitto“. She writes it there Bank of Italy in its Economic bulletin He added that "the current collective bargaining system generally does not include automatic wage indexation clauses for inflation." For contracts that do, indexation is usually based on a price index that excludes imported energy products. Wage growth had been moderate both in the fall and in January and February.
Bank of Italy: How Much Does the War Impact Economic Estimates?
Le war in the Middle East, and its duration, weighs on the prospects of the Italian and European economies, posing risks to household consumption and bank lending. The Bank of Italy reiterates its forecast, released in recent days, of a +0,5% in 2026, which would drop to zero in the event of an adverse scenario (prolonged high oil prices). Rising energy costs and uncertainty have dampened household spending in the first three months of the year., it reads. And the prolongation of the war could also heighten the perception of risk, making banks more cautious in granting credit.
Bank of Italy: GDP slows but positive thanks to Olympics
In the first quarter of the year the GDP slowed down compared to the +0,3% of the last three months of 2025, but remained positive thanks also to the contribution of Winter Olympic Games, says the Bank of Italy, which however does not provide a specific estimate. "In the first three months of this year, growth appears to have continued at a slower pace" than in the last quarter of 2025. The output was "obtained from service activities, particularly those aimed at businesses. The Winter Olympics appear to have provided a positive contribution, as evidenced by data on foreign visitors and international flights. "After the good result of the previous quarter, capital accumulation would have stagnated: the expansion of investments related to the digital and energy transitions would have offset the performance of the residential sector. The contribution of foreign demand to growth would have returned to positive territory, due to the increase in exports of both goods and services," it reads.
Bank of Italy on energy price hikes
I increases in the price of energy products it was transmitted to the fuel prices "But it hasn't yet affected electricity and gas prices." The Bank of Italy reiterated its recent estimates of inflation rising to 2,6 percent in 2026, before falling back below 2 percent in the following two years. These forecasts, in the adverse scenario of prolonged high oil and gas prices, would see inflation rise to 4,5 percent this year, 3,3 percent in 2027, and 2,2 percent in 2028.
Bank of Italy: High energy prices threaten Made in Italy exports.
High energy prices for a long time would not only affect consumption and inflation but would undermine the competitiveness of Made in Italy exports in energy-intensive sectors such as chemicals, metallurgy, non-metallic mineral processing products and paper productsThe Bank of Italy emphasizes this in a specific focus of its Economic Bulletin, which states that these are key sectors that represent 16 percent of Italian goods exports, a share similar to that of Germany.
Then there are the effects on trade with the Gulf countries With these, we have a large surplus, excluding crude oil and gas. Via Nazionale experts emphasize how, in recent years, this area's importance as a destination market for Italy has increased: in 2025, it accounted for approximately 4 percent of Italy's exports of goods.
Over a quarter of the total consisted of machinery and metal products, in addition to a wide range of other products (food, fashion items, pharmaceuticals and jewellery). Italian imports of non-energy goods from Middle East instead represented less than 1 percent of the total and mainly included metals (aluminum) and basic chemical products (polymers and plastics). In services, Italy had a deficit with the Gulf countries, mainly due to transport; excluding the latter, the balance was positive by almost one billion euros, thanks mainly to tourism (about 3 percent of Italian tourism revenues).
Bank of Italy: Industrial production is declining
La Italian industrial production is said to have declined again in the first quarter After the autumn growth due to the ongoing conflict and the rise in energy prices, according to the Bank of Italy, "industrial production rose slightly in February compared to January (0,1 percent). Overall, the first two months of the year saw a decline in activity compared to the end of 2025, largely attributable to the sectors that had shown more pronounced growth last year, particularly the pharmaceutical sector." The increase in energy prices and other production inputs and the worsening demand outlook since the end of February will presumably have impact on production – especially in energy-intensive sectors – and on plans for investment of businesses.
What Governor Panetta said
"There was no alarm about public financesThis does not mean that we can relax, we must continue to be careful and keep public finances under control. We have a strong banking system, we have increased the level of investments, all in all it is still quite good". This was stated by the governor of the Bank of Italy, Fabio Panetta, in a briefing with the Minister of Economy Giancarlo Giorgetti, in Washington. "An energy crisis is never good news, especially for a country like ours, for an economy like ours, which depends on energy imports and fossil fuels from abroad. We have been less affected by this crisis than in the past: the energy efficiency of the Italian economy has improved significantly," Panetta concluded.
Giorgetti on MPS
"As is well known, the government immediately stated that it would not participate in the meeting. It was one of the conditions agreed with the European Commission when the government withdrew control of the bank." Giorgetti, regarding the assembly of Mps Bank with the turnaround that brought back Louis Lovaglio at the helm of the Siena institute, speaking in Washington. “We are satisfied e proud of having returned the bank in the interest of all Italian taxpayers." Panetta, however, did not comment: "I am not talking about individual banks," he reiterated, as he always does on various financial matters.
