The Italian economy continued to grow in the first half of this year, despite global uncertainty and slowing industrial activity, new data from Istat, the Italian national statistics agency, has found.
According to Istat, Italy outperformed the wider euro area during the first quarter of 2026, with GDP growing by 0.3% compared with the previous quarter.
Industrial production weakened in May after three consecutive months of growth, Istat noted, with the seasonally adjusted industrial production index falling by 0.3% compared with April. However, output over the March to May period remained 0.9% higher than in the previous three-month period.
Based on current estimates, Italy‘s annual growth rate for 2026 stands at 0.6%.
Labour market
Italy’s labour market has showed mixed results in recent months. Employment declined in May to 24.336 million people, with reductions recorded among both men and women, and across all age groups except workers aged 50 and over. The fall was concentrated among employees on fixed-term contracts.
Despite the decline in employment, Italy’s unemployment rate fell by 0.1 percentage points to 5.0%, remaining below the euro area average of 6.2%.
Inflation accelerated during June, the statistics body added. According to preliminary estimates, Italy’s Harmonised Index of Consumer Prices (HICP) increased by 3.1% year on year, exceeding the eurozone average of 2.8% for the first time since October 2023.
Market conditions
On a global level, economic conditions remain mixed, Istat added, noting that the United States continues to record sustained economic growth, while expansion in the euro area has been more moderate due to the bloc’s greater exposure to energy market disruptions linked to tensions in the Middle East.
Elsewhere, in China, manufacturing output remains supported by exports in high-technology sectors, although domestic consumer demand continues to be weak.
‘The outlook for global economic growth remains uncertain, although the geopolitical situation has shown a slight improvement compared with the severe tensions at the start of the year,’ Istat said. ‘Despite the recent fall in energy costs, the systemic effects of the conflict between the US and Iran are still weighing on global inflation.’ Read more here.
