Increased tariffs have a negative impact on Italy's GDP of 0.4/0.5 points over two years
After the economic downturn in GDP in the second quarter, a relative stagnation is estimated for the third quarter. The year 2025 will end with an average GDP growth of around 0.5 %.
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Key points
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Lingering uncertainty is weighing on the activities of Italian companies and on the country's growth. Dominating the scene is the tug-of-war over tariffs between the United States and Europe, accompanied by geopolitical tensions and still unresolved conflicts, and by household consumption that continues to be very weak. A picture that has a negative impact on the prospects for average GDP growth, which can be estimated at around 0.5% at the end of the year. This is, in a nutshell, the scenario outlined by the Monitor "From tariffs tug-of-war to the growth stalemate", produced by Area Studi Legacoop in collaboration with Prometeia.
Weak consumption and propensity to save on the rise
If the foreign front appears problematic, not even domestic demand is providing momentum to the economy. The cautiousness recorded in the first quarter of this year -with households preferring to increase their propensity to save, despite a recovery in purchasing power, which remains about two percentage points above pre-pandemic levels- was confirmed in the second quarter, in which household spending recorded zero growth compared to the previous three months.
The impact of past inflation is still significant. Compared to 2019, the cost of financial services rose by 48%, that of food by 26%, and that of housing services by 15%. The greatest economic impact occurred among low-income households, for whom food and housing services account for a high share of their respective baskets.
GDP outlook 2025: average growth around 0.5%
After a positive first quarter (+0.3% on the previous period), the Italian GDP fell by 0.1% in the second quarter, reflecting both the negative backlash on exports after the anticipation effect in the first and the weakness of consumption. Looking ahead, economic indicators do not point to a turnaround in the Italian cycle for the third quarter, which will remain characterised by a particularly weak trend in GDP. According to the estimates contained in the Monitor, 2025 will close with an average GDP growth of around 0.5%, thanks above all to the positive contribution of NRP investments.
