“Global growth is exposed to risks that are more numerous, more interconnected and more difficult to manage than in the past.” With this statement the governor of the Bank of Italy Fabio Panetta summarizes the structure of its Final considerations, dedicated to a global economy that has entered a phase of greater instability. After a surprisingly positive 2025, supported by the push of theartificial intelligence, from investments in new computing systems and favorable financial conditions, the international picture rapidly deteriorated with the conflict in Middle East, the energy tensions , resurgence of inflationary pressures.
The analysis also focuses on the role of artificial intelligence, already a driver of growth but still highly concentrated and uneven in its diffusion: a technology capable of increasing productivity and investment, but also of widening disparities if not accompanied by adequate policies. For the governor, the crucial challenge lies precisely in the ability to manage these transformations—between technological innovation, global imbalances, and European fragilities—transforming them into stable and widespread growth.
The crisis in the Middle East and the risk of inflation
The situation has changed drastically thanks to the conflict in the Persian Gulf and the blockade of the Strait of Hormuz, a strategic hub for global oil and gas, "which has led to supply shortages and sharp increases in energy commodity prices," and consequently "a significantly deteriorated economic outlook," continues the head of Via Nazionale, emphasizing: "It is difficult to determine how long the hostilities will last and how stable the subsequent situation will be." According to the estimates cited by Panetta, even in the most favorable scenario, global growth will slow to 3,1% in 2026, while inflation will rise to 4,4%. But if the conflict were to drag on, the situation would be "much worse."
"The overall picture remains fragile. With massive public debt and growing vulnerabilities in non-bank intermediation, even limited shocks can generate cascading effects."
Trade: "Fragmentation does not eliminate imbalances"
Plenty of space also for international trading and protectionist tensionsIn 2025, world trade grew by 5%, supported by the reorganization of global supply chains and less aggressive than expected US tariffs. For Panetta, however, protectionist policies have not resolved global imbalances. "Ninety percent of the burden of tariffs has fallen on American consumers and businesses," while China has strengthened its commercial presence. The governor warns of the risks of a permanent economic fragmentation: “Fragmentation does not eliminate imbalances: it shifts them, hides them, makes them deeper and more expensive to correct.”
The reference is primarily to the comparison between the United States and China. Washington continues to run a large trade deficit and a net debt position equal to 90 percent of GDP; Beijing, on the other hand, maintains enormous external surpluses based on a model that suppresses domestic consumption and supports exports through aggressive industrial policies. Even the'Europe is being reminded of its responsibilities: the euro area surplus, the governor observes, reflects "the chronic difficulty in transforming savings into innovative investments."
Artificial intelligence is changing the economy and work
One of the central themes of the Concluding Considerations is theartificial intelligence, defined as a technology already fully within the global macroeconomic balance. "We are no longer in an experimental phase – states Panetta -. The crucial point, however, concerns the adoption capacityThe governor observes that "the greatest gains have often gone not to those who originated the innovations, but to those who knew how to adopt and apply them." It is on this ground, he warns, that the future growth of Europe and Italy will be played out.
AI is already transforming investment, trade and productivity, but also the job marketFor the first time, he emphasizes, a technology can perform "highly cognitive tasks" traditionally reserved for humans. Panetta, however, urges us to avoid alarmist approaches: "Great innovations don't just make some professions obsolete: they generate new ones." The real challenge will be accompany workers and businesses in the transition, investing in training and skills. "For artificial intelligence to become a driver of widespread growth, we need to encourage its adoption in businesses and invest in people's training."
Europe lags behind in innovation and markets
On the European front, Panetta speaks openly of "unresolved fragilities." The European Union, he observes, continues to depend on foreign countries in strategic sectors such as energy, defense, and advanced technologies. The governor criticizes the slow pace of European reforms and the delay in implementing measures on competitiveness and artificial intelligence. "International instability leaves no room for hesitation or partial responses," and warns: "In the worst-case scenario, a prolongation of the conflict and further damage to the Gulf's energy infrastructure could reduce growth by a total of 1 percentage point in 2026-27. Inflation could peak above 6% and, if left unchecked, remain above target for a long time, as the energy shock spreads to a growing number of sectors."
The issue remains that of investments. "The Union has abundant savings, but is unable to transform them into productive investments," Panetta emphasizes, once again calling for a European capital market completely integrated and a common European sovereign title, capable of mobilizing savings towards strategic investments.
Monetary Policy: "Don't be tied to a predetermined path"
La monetary policy It faces a scenario in which "the economic outlook has deteriorated sharply" and uncertainty remains high regarding the evolution of inflation and economic activity. The governor emphasizes the need to avoid automatisms and maintain a flexible approach, recalling that "monetary policy cannot prevent rising energy prices from being passed on to the productive system," but must prevent this from translating into apersistent inflationCentral to this is the risk of a spiral between prices and wages, which "once initiated, would be damaging and costly to undo." In this context, monetary policy must act promptly and moderately, anchoring expectations and preserving price stability as a prerequisite for growth.
Italy: slowing growth and weak productivity
In the chapter dedicated to Italy, Panetta acknowledges the country's resilience in recent years. Since 2019, GDP has grown by over 6%, driven by investments and exports, while employment has increased significantly. "The prudent management of public finances in recent years has contributed to these results," the governor observes. In recent months, however, the momentum has weakenedGermany's difficulties, the deteriorating geopolitical situation, and trade tensions weighed on the slowdown. In 2025, the Italian economy grew by only 0,5%.
Panetta identifies in the productivity The central structural problem: since the beginning of the century, output per hour worked in the non-financial private sector has grown by just 6%, much less than in other major European countries. "Without a significant increase in productivity, the Italian economy could remain stuck at structurally modest growth rates," he warns. In this context, Pnrr is described as the main driver of the recovery of the investmentsBetween 2021 and 2025, the Plan's interventions exceeded €100 billion, contributing approximately 30 percent of the overall accumulation. The governor acknowledges that the Plan has introduced faster and more efficient administrative procedures, but warns that "much will depend on the ability to ensure continuity in the modernization effort."
Once again, the decisive issue is the'artificial intelligence, for the governor, "a decisive lever for boosting the productivity of the Italian economy," but the delay in adoption remains evident. Only 5% of Italian companies currently make extensive use of it, and the risk, he warns, is repeating the mistakes of the 1990s regarding digital technologies. "Today we need to act quickly," says the governor. In a scenario of widespread AI diffusion, productivity could grow by more than one percentage point per year, also offsetting the negative effects of the demographic crisis.
Great attention is also paid to trainingThe governor points to Italy's lagging behind in graduates, the high proportion of young people neither in education nor employment, and the continuing drain of skills abroad. "A production system that is not very innovative generates insufficient demand for skilled labor and reduces incentives to invest in education; the skills shortage, in turn, makes it difficult to adopt new technologies."
On the energy front, the message is clear: Italy must accelerate the transition for reduce vulnerability to international shocksEnergy efficiency, renewables, and networks are identified as the three strategic priorities, along with an assessment of new nuclear technologies.
On banks: "Now there's room for new mergers."
Il banking system The Italian economy is approaching this phase "from a position of solidity," with high profitability and capitalization, and a market-to-book ratio among the highest in Europe. However, the picture is diverse: the largest banks are benefiting from recovering interest margins, rising commissions, and cost containment, while for less significant intermediaries, "profitability remains more subdued and operating efficiency weaker." Recent tensions with some smaller operators have highlighted, above all, "weaknesses in corporate governance systems and, at times, irregular conduct," confirming the crucial role of supervision in maintaining trust in the system.
The governor underlines how the financial solidity opens now space for new aggregations, both national and cross-border, which can strengthen the European banking market. In Italy, well-designed transactions can "make banks more competitive and foster greater revenue diversification," but must avoid weakening competition, especially in local markets. The notes state: "At the end of 2025, the top five Italian groups accounted for 68% of the system's total assets, a lower share than in other major European countries, with the exception of Germany."
Alongside bank credit, the structural limit of the Italian economy is forcefully recalled: the need to develop the risk capitalPrivate equity and venture capital are still not widely used, but they are essential for supporting innovative businesses and technology-intensive sectors, in a context where "the companies they support innovate more and grow more rapidly in terms of turnover, employment, and productivity."
Conclusions
In the final considerations the theme of the international cooperationEighty years after the birth of the Republic, the governor recalls the legacy of Bretton Woods and the vision of Luigi Einaudi, founded on "a farsighted vision of the solidarity of interests."
"Today, that order is undergoing a profound crisis," states the head of Via Nazionale. But the answer, he insists, "cannot be closure." For Europe and Italy, the challenge will be to manage the technological and geopolitical transition without giving in to fragmentation. "The technological revolution will not spontaneously produce shared well-being: it must be managed," the governor warns in his closing remarks. The decisive criterion will be the ability to offer prospects to the new generations: "Creating the conditions for young people to realize their aspirations and contribute to the country's progress is not just an economic responsibility: it is the civic duty of our time."
