Confindustria: GDP to fall in 2026 (+0.5%) if the conflict ends now

With its spring forecasts, the Centro studi di Confindustria cuts its growth estimates by assessing the impact of the conflict in Iran. Three scenarios: in the worst case, that of a war lasting the whole year, 10 months, GDP 2026 is seen "in recession" at - 0.7%; with four months of war, until June, "it is estimated in stagnation", zero growth; with a stop to the war by March "it will be +0.5%". In the autumn, the estimate of the economists of Viale dell'Astronomia was +0.7%.

The three scenarios 'do not contemplate a desirable action at both European and Italia level to address a serious situation': for Confindustria, 'therefore, the immediate preparation of Italian and European measures capable of supporting the economy of companies and families is required'.

"What we are asking is to ground or prepare for measures that can be incisive and strong in order to be able to support Italian companies and industry, European companies as well," indicates the president of Confindustria, Emanuele Orsini, commenting on the estimates. "Let's think about Eurobonds, let's think about what was done during the Covid", "about a common public debt, about having a single European energy market": we need "to be able to give an answer quickly". Urgent measures are needed, especially at European level'. "Today Europe needs to act fast. We need Europe to define the lines but we cannot afford to take too long'.

according to SCS forecasts, if the war in Iran ends by March, "the price increase of oil and gas prices taken together, expressed in euros, in 2026 is assumed to be +12% compared to 2025"; with four months of conflict, up to June, "it rises to +60%; with 10 months of conflict, up to the end of the year", "it rises to +133%".

"This means, mechanically and for the direct impact on energy prices to the final consumer alone," the economists from Viale dell'Astronomia explain, "a potential increase of more than +13 points in inflation in the worst-case scenario compared to 2025" and "+6 points" in the intermediate scenario. "To this direct impact must be added the second-round effects, i.e. price increases in non-energy goods and services that incorporate the increase in energy costs" that "in Italia develop in about 6 months from the initial shock". With a stop to the war in the Middle East by March, inflation "is expected to rise sharply from the lows of the beginning of the year, peaking at close to 3%".