Giorgetti: 'Government will continue to support families and businesses, it would be irresponsible not to'

'The challenge that awaits us is therefore to combine support for businesses and households in this difficult phase with a strong determination to continue along the path already taken towards greater energy independence, security, and sustainability of public finance,' the minister emphasised. Illustrating the conclusions that can be drawn from the Document's findings, Giorgetti explains: 'the evolution of the macroeconomic framework and public finance over the next three years appears to be closely linked to developments in global geopolitical tensions. A renewed solidity of international relations is an essential prerequisite to ensure the stability and predictability of the system. Italia will continue to work actively to foster this scenario, without prejudice to the impact of additional exogenous factors and global dynamics that will require a coordinated approach at the international level".

In an alternative scenario in which 'a highly conflictual situation would persist, with a more adverse evolution and a much slower return to relaxed conditions of the main international variables affecting the Italian economy', the impact on GDP growth, compared to the baseline scenario envisaged by the government, would be -0.2 percentage points this year, -0.8 points next year, and -0.1 points in 2028. This is the risk scenario analysed in a focus of the Public Finance Document. If this were the case, the 2026 GDP, which the government estimates at +0.6 per cent, would fall to 0.4 per cent; in 2027 it would fall into recession to -0.2 per cent (from +0.6 per cent currently forecast); in 2028 it would be +0.7 per cent (instead of +0.8 per cent).

Considering the risk scenario as a whole, the GDP growth rate would be 0.2 percentage points lower in 2026, 0.8 points in 2027 and 0.1 points in 2028, and then 0.2 points higher in 2029, compared to the macroeconomic forecast framework, the document says. The risk scenario contemplates, first of all, 'even more significant adverse effects on energy commodity prices, which would grow with greater intensity and more persistently than in the reference scenario', with oil and gas prices at USD 115.5 per barrel and EUR 93.4 per MWh this year and at USD 80.3 per barrel and EUR 48 per MWh next year. A second factor in the risk scenario relates to financial market conditions, with the assumption of a level of the ten-year BTP yield rate higher than in the baseline scenario by about 30 points in 2026, 60 points in 2027 and 2028, and 50 in 2029. Another component of the alternative scenario relates to "exchange rate developments, with a possible strengthening of the dollar relative to the baseline scenario, as the US economy would be relatively less exposed to a worsening of the conflict". The last factor in the risk scenario is represented by a weaker weighted world trade dynamic for Italia than in the baseline scenario.

The Public Finance Document states that "according to the updated forecast, the unemployment rate in 2026 will average 5.5 per cent and inflation, as measured by the consumption deflator, will accelerate to 2.8 per cent, peaking in the fourth quarter". "Over the three-year period 2027-2029, GDP growth would remain at 0.6 per cent in 2027 and stand at 0.8 in both years thereafter, with inflation at 2.0 in 2027, 1.5 in 2028 and 1.9 in 2029," the Document continues.

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