GDP: UPB raises its forecast to +0.9% for 2026 and confirms +0.6% for 2027
The Italian economy is holding up better than expected, with inflation rising due to energy-related pressures, affecting purchasing power and growth prospects
(Il Sole 24 Ore Radiocor) - The economy is proving more resilient than expected, despite the international landscape being subject to shocks caused by high levels of geopolitical and trade instability: growth forecasts for 2026 have been revised upwards. This is highlighted in the August Economic Outlook Report by the Parliamentary Budget Office, which updates the economic outlook: for 2026, the UPB estimates GDP growth of 0.9 per cent, representing an upward revision of four-tenths of a percentage point compared with the previous estimates from April, which were drawn up during the validation process for the Public Finance Document; the forecast of 0.6 per cent for 2027, however, remains unchanged.
Inflation: Upb forecasts an average of +3.1% in 2026 and +2.3% in 2027
Rising prices are one of the key areas of focus in the current economic landscape. In the second quarter of 2026, inflation rose to 3 per cent, driven mainly by higher energy prices resulting from tensions in the Middle East, before falling slightly in July (to 2.8 per cent). This is reported by the UPB in its August Economic Survey. Price trends have responded more rapidly than in the rest of the Eurozone, closing the previously recorded negative inflation differential with European partners. In the forecast scenario, the household consumption deflator is expected to rise by around three percentage points on average in 2026, before slowing to 2.3% in 2027; labour costs are expected to rise at a slower rate than consumer prices, leading to a temporary erosion of the purchasing power of labour income.
