Bank of Italy: Consumer spending in Italia slows in the second quarter of 2026

Whilst household consumption rose in the first quarter of 2026 and the propensity to save remained stable, it would have slowed significantly during the spring months, in line with households’ increasingly pessimistic assessments of the international economic outlook and their greater caution in spending decisions in the face of the sharp rise in energy prices. This point is highlighted by the Bank of Italia.

During the winter months, Italia’s GDP, as highlighted in the Economic Bulletin published on Friday 17 July, continued to grow at a moderate pace (0.3 per cent). ‘In the second quarter of 2026, marked by the conflict in the Middle East, capital accumulation is expected to have slowed and household consumption to have declined. According to our forecasts published in June – the document states – when adjusted for the number of working days, GDP will rise by 0.5 per cent in 2026, 0.4 per cent in 2027 and 0.9 per cent in 2028. Given the stronger performance in the first quarter compared with initial expectations, GDP growth is set to rise to 0.6 per cent this year. The sharp rise in energy prices – warns the Bank of Italy – will lead to a widening of Italia’s energy deficit.”

The survey highlights that, following a first quarter of the year in which household consumption grew and the propensity to save remained stable, ‘consumption is thought to have slowed significantly in the spring’. ‘According to our estimates,’ explains the Bank of Italy, ‘despite some encouraging signs from retail sales and payment flow data, spending decisions in the second quarter were characterised by caution, affected by rising energy prices and their impact on households’ disposable income.’

‘Evidence consistent with these estimates,’ the report continues, ‘comes from Istat’s economic surveys. Over the same period, the confidence index fell further, falling below the historical average, particularly in the components relating to expectations regarding personal financial circumstances and the general macroeconomic outlook. The index relating to intentions to purchase durable goods also fell, in line with the slowdown in car registrations.”

In the report, the bank based in Via Nazionale goes on to note that ‘the resumption of hostilities between the United States and Iran has reignited tensions in the energy markets. The rise in oil and natural gas prices has put upward pressure on inflation in the major economies. The high level of uncertainty regarding when flows through the Strait of Hormuz will resume is weighing on global trade and growth. Sovereign bond yields – the report continues – have risen, whilst share prices continue to benefit from the strong performance of artificial intelligence infrastructure providers”.