Italy – 2024-2025 Scenario: sluggish growth, a return to the past?

In a still uncertain context, Italy's performance, compared to other countries in the Eurozone, appears rather positive. With a GDP increase of 0.2% in the second quarter compared to the previous quarter, the Italian economy is growing at the same pace as the French economy, despite a less favourable carryover (+0.6% in 2024), and is performing better than Germany, where GDP decreased by 0.1% over the quarter. However, in the third quarter of 2024, several signs of a slowdown persist. The labour market may provide some support, with the unemployment rate stabilised at 6.2%, but consumption and investment prospects are expected to remain weak.
Household consumption growth, after a slowdown in the second quarter, is expected to maintain a modest pace in the third quarter. Spending on goods, particularly durable goods, could stagnate, while services are expected to continue growing moderately. Household caution, which contributes to a high savings rate, could limit the recovery of consumption, despite a slight increase in expected real wages.
Regarding investment, the outlook looks set to remain uncertain. The end of the Superbonus incentives is expected to weigh on residential construction, while industrial investment, although supported by measures such as the Transition Plan 5.0, could be affected by ongoing economic uncertainty. Lastly, exports look set to continue suffering from sluggish international demand, particularly in the intermediate goods and automotive sectors. 
In 2025, although the decrease in rates may provide some support to growth, the positive effects of monetary easing will be partially offset by the expected correction in the construction sector. In this context, activity is expected to continue growing at a moderate pace over the forecast horizon, with 0.8% anticipated for 2024 and 2025.