Italian economy: Activity moderates, inflation holds steady

Italy's economic activity showed a mixed picture in late 2025 and early 2026.

Quarterly GDP growth, after reaching 0.3 percent in Q1 2025, slowed to 0.0 percent in Q2, then modestly recovered to 0.2 percent in Q3 and 0.3 percent in Q4. Industrial production indices fluctuated, while business confidence remained varied.

The labor market maintained stable employment levels and activity rates, with contractual earnings and labor costs per hour worked registering moderate year-on-year increases.

Consumer price inflation (HICP) in Italy stood at 1.5 percent in March 2026, up from 1.0 percent in January.

Euro area HICP was 2.5 percent in March 2026.

Core inflation components, excluding food and energy, remained relatively stable, contributing to the overall price dynamics.

House prices continued their steady increase, while sales volumes adjusted for seasonal effects.

Italy's goods exports showed fluctuations in early 2026.

The balance of payments for January 2026 recorded a current account deficit of €1.8 billion, a notable shift from a €5.3 billion surplus in 2023.

Households' financial debt and firms' borrowing indicators reflected evolving financial conditions.

Bank lending to the private sector continued to grow, with interest rates on new loans showing moderate changes.

Non-performing loan rates remained stable, and banks' capitalization levels were robust.

Public finance indicators highlighted government debt stocks and average costs, alongside yields and spreads on government benchmark securities.