After Confindustria, Also Bank of Italy cuts growth estimates for the next three years due to the economic uncertainty triggered by US tariffs. According to the latest macroeconomic projections, Italy will grow by 0,6% in 2025, 0,8% in 2026 and 0,7% in 2027. In December, estimates predicted GDP growth of +0,8% this year, +1,1% next year and +0,9% in 2027. But the
“The forecast scenario presented here includes a first and necessarily partial assessment of the effects of the duties announced on April 2 from the United States. In particular, the analysis does not consider the impact of possible retaliatory measures by the European Union and other economies; furthermore, the possible repercussions of the announcements on international markets are not taken into account”, underlines via Nazionale. Just today, China announced the imposition of duties of 34% on US products starting from 10 April and controls on the exports of 7 “items related to rare earths”. The EU, on the other hand, despite having declared itself available to negotiate, anticipated that the first countermeasures will come into force on 15 April, followed by other measures on 15 May. The situation could therefore worsen further, with consequent greater impacts on growth, Bankitalia warns.
Bankitalia: consumption drives GDP
GDP growth is affected by the effects of the tightening of trade policies, but it is supported by the expansion of consumption. In particular, household consumption would increase at rates higher than GDP, benefiting from the recovery of purchasing power, explains Bankitalia. investments on the contrary, they would expand to a limited extent. Construction spending, although slowed by the removal of incentives for residential construction, would benefit from the finalization of projects financed with PNRR funds.
“Investment in capital goods would be affected by the uncertainty generated by increased protectionism, the effects of which would however be more than offset this year by the stimulus deriving from the incentives connected with the Transition 4.0 and 5.0 programmes”, continues the note, which underlines how the progressive transmission to the financing conditions of the reduction in interest rates could have a positive impact especially in the next two years.
Inflation at 1,6% in 2026
As for consumer prices, Via Nazionale confirms the December estimates. Inflation will stand at 1,6% in 2025, to 1,5% in 2026 and 2% in 2027, when the entry into force of the new system for trading allowances for pollutants and greenhouse gases in the European Union could cause a temporary increase in energy prices. underlying inflation, instead, should fall to 1,5 percent this year, to remain stable around that value in the next two years.
“Inflation could suffer, especially in the short term, upward pressure from a retaliatory increase in tariffs by the EU. On the other hand, the strong deterioration in demand caused by a more marked impact of the tightening of trade policies would exert opposite effects, which would tend to prevail towards the end of the three-year forecast period”, analyses Bankitalia.
Duties weigh on exports
“Despite the ongoing tightening of trade policies, foreign demand would continue to expand, albeit at low rates, significantly lower than the average rates of the twenty years preceding the pandemic,” highlights Bankitalia, which also estimates, based on futures contracts, a decrease in oil and gas prices over the three-year period. Financing costs for businesses and families would gradually decrease.
"The exports would be significantly affected by the effects of the increase in duties by the Italians. The cheap imports would increase moderately in 2025 and more markedly in 2026-27, consistently with the recovery of exports and productive investments. The current account balance would remain stable in relation to GDP in the three-year forecast period, at levels around 1 percent", the note reads.
Employment continues to grow
Good news on the job market, with employment which should continue to grow, although at rates slightly lower than those of GDP (0,5 percent on average). The rate of unemployment, which averaged 6,6 percent in 2024, is expected to fall to around 6 percent this year and remain stable over the next two years.
Risk of further worsening
“These projections – warns the Bank of Italy – are subject to high uncertainty connected above all with the evolution of the international context. Exports and investments could be affected to a greater extent than expected by thetightening of trade policies and its impact on business confidence. Particularly marked negative effects could arise from a further increase in uncertainty about trade policies, from possible retaliatory measures and prolonged tensions on financial markets”. On the contrary, the central bank underlines, “positive effects could emerge following a more expansionary orientation of budget policy at European level, also in connection with the announcements of an increase in defense spending”.
