Banca d'Italia's February brief details mixed Italian economic trends
The Banca d'Italia has released its 'Italian Economy in Brief' for February 2026, providing a comprehensive overview of the country's economic activity, labor market, and financial conditions. The report details key indicators across various sectors, including prices, exports, and public finances.
Italy's growth trajectory and labor market stability
The Italian economy continues to show signs of subdued growth, with GDP expanding by 1.0 percent in 2023 and 0.7 percent in 2024. Projections for 2025 suggest modest quarterly growth between 0.0 and 0.3 percent, reflecting limited dynamism in household consumption and gross fixed investment.
Industrial production and business confidence remain below 2021 levels, with firms' investment assessments largely cautious.
In contrast, the labor market exhibits resilience.
Employment figures have maintained an upward trajectory, and the activity rate for the 15-64 age group has increased.
Italy's unemployment rate is stable within the Euro area, and contractual earnings show moderate year-on-year increases, reinforcing a narrative of labor market stability amidst economic moderation.
Inflation trends, trade balances, and banking sector strength
Italian inflation shows a moderating trend, with the HICP at 1.0 percent in January 2026, down from 1.2 percent in December.
Euro Area HICP stood at 1.7 percent.
House prices continue their upward trajectory, with stable sales volumes.
The current account balance remains positive, contributing to an improving net international investment position.
Domestically, households maintain a lower financial debt-to-gross disposable income ratio compared to the Euro area average.
The banking sector demonstrates resilience, with moderate growth in private sector lending and low non-performing loan rates, supported by robust capitalization.
Resilience tested by persistent headwinds
Italy's labor market and banking sector show commendable resilience, providing a crucial buffer against persistent headwinds.
Yet, subdued growth and cautious investment highlight deep-seated structural challenges demanding urgent attention.
Without decisive reforms to boost productivity and foster innovation, the country risks prolonged underperformance within the Euro area.