Forecasts

FMI, energy price will weigh on Italian households from 450 to 2,270 euro

According to the Monetary Fund, recession risks in the Eurozone are increasing. "Derogations from the Stability Pact only for extraordinary shocks, this is not the case"

5 May 2026

4' min read

Translated by AI

Versione italiana

Key points

Eurozone, recession risks increase
Energy shock pushes spreads, risks for stability
"EU single market increasingly urgent, lever for growth and resilience"
"Derogations from the Stability Pact only for extraordinary shocks, this is not the case"
We need a bigger EU budget to tackle crises
Rates are driven by data, in the Eurozone towards 50 basis point rise"
"Excise cuts distort prices"
High-debt EU countries continue with consolidation

4' min read

Translated by AI

Versione italiana

"With current prices, the average EU household would lose around €375 in 2026, or 0.7 per cent of average consumption, due to all price increases." This is what Oya Celasun, Deputy Director for Europe at the Monetary Fund, told the Eurogroup yesterday. "The impact varies widely, from EUR 620 in Slovakia to EUR 134 in Sweden. According to the 'severe' scenario of the IMF's April 2026 Weo, the average loss would rise to EUR 1,750." The intervention chart also includes estimates for Italia: from the Fund we learn in detail that the estimated impact for Italia is 450 euro in the basic scenario and 2,270 euro in the severe one.

Eurozone, recession risks rise

"Under the baseline scenario, growth in the eurozone is expected to slow to 1.1 per cent in 2026 and 1.2 per cent in 2027, with inflation rising by 0.7 percentage points to 2.6 per cent in 2026 and falling to 2.2 per cent in 2027. In April's 'severe' downside scenario, the euro area could move closer to recession," the IMF writes again in its outlook on the EU and the energy price, quoting the estimates already released in April and pointing out that "markets are becoming more pessimistic about energy prices", approaching the "adverse scenario". "Downside risks are increasing," the Fund points out.

Energy shock pushes spreads, risks for stability

The IMF in its outlook on the EU and high energy prices also points out that with the energy shock "yields and spreads on government bonds have risen, however, the situation could worsen further, as expected in the most severe adverse scenarios". The IMF points out that 'equity valuations in some sectors are high and an increase in spreads on government bonds could affect the private sector, damaging credit quality' and calls for 'close monitoring of these risks to financial stability'.

"EU single market is increasingly urgent, lever for growth and resilience"

"Europe's single market agenda has become even more urgent, as it would not only increase growth in a sustainable way, but also greatly improve the resilience of European economies," the IMF writes in its outlook on the EU and the high energy price, quoting estimates already released in April.

"Derogations from the Stability Pact only for extraordinary shocks, this is not the case"

The recourse to the general or national safeguard clause of the Stability Pact is "designed for extraordinary circumstances" and, "at the moment, we do not seem to find ourselves in such a scenario," said the deputy directors of the IMF's European department, Helge Berger and Oya Celasun, responding to journalists during the presentation of the outlook on the EU and the energy price. "There are ways to respond to the shock we are experiencing in a restrained and prudent way. If the support is targeted to those who need it, it will not cost as much and it will be easier for governments to compensate for it within existing budgets," they pointed out.

More EU budget needed to tackle crises

A larger European budget geared towards the provision of common public goods can strengthen the Union's ability to tackle crises and support economies, recommends the International Monetary Fund in its outlook. According to the IMF, greater intervention at the European level "in areas such as defence, research and development and energy investments" would reduce the fiscal burden at the national level while improving the coordination and efficiency of spending. A strengthened EU budget, the Fund points out, could be particularly important in a severe crisis scenario, offering an additional tool to support Europe's economic resilience.

Rates are data-driven, in the Eurozone towards 50 basis point rise

In the eurozone 'the IMF expects a cumulative increase of 50 basis points in the reference rate (to 2.5 %) by the end of 2026. This would keep the real interest rate broadly unchanged. But if there are signs that core inflation will rise significantly and expectations begin to move away from the target, monetary policy intervention will be required,' the IMF writes. "Monetary policy needs to be adapted to initial conditions on the ground and adjust to changing data," it points out.

"Excise cuts distort prices"

"European governments are understandably acting to provide quick relief to struggling families and businesses. The measures announced are mostly tax-based, with about three quarters of European countries implementing fuel excise adjustments. The measures tend to be temporary and cost much less than those implemented after the Russian invasion of Ukraine, but too many of them are distorting energy market prices,' the IMF further points out. "Policies that suppress the energy price signal are highly problematic, as they reduce the incentive to decrease energy consumption, improve efficiency and invest in alternatives. This slows down the necessary adjustment to a limited supply. Europe can do better,' he points out, urging that 'interventions should be targeted, temporary and preserve price signals' and 'coordination' between countries.

High-debt EU countries continue with consolidation

In Eurozone countries with high debt levels and little fiscal space, it is necessary to continue with consolidation plans, avoiding putting financial markets under pressure in a phase of high uncertainty. This is what the International Monetary Fund emphasises in its outlook on the EU and the energy price. According to the Fund, states with high debt but room for manoeuvre can let the automatic stabilisers operate and, if the environment worsens, provide further macroeconomic support, including through temporary and targeted measures on the energy front. Overall, the IMF calls for an 'agile' and careful fiscal policy, also in the light of growing spending pressures related to defence, pensions, health and energy transition.