War, energy, growth: what can happen with the worst-case scenario for Italia
If 'a highly conflictual situation persists, 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
Key points
In an alternative scenario in which 'a highly conflictual situation persists, with a more adverse evolution and a much slower return to relaxed conditions of the main international variables influencing 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 reads.
The Energy Race
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.
The Financial Match
A second factor in the risk scenario relates to financial market conditions, with the assumption of a level of the 10-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'.
World Trade
The last factor in the risk scenario is a weaker weighted world trade dynamic for Italia than in the baseline scenario.
Upb valid framework, strong risks, possible revisions soon
Lilia Cavallari, president of the Parliamentary Budget Office, informed the presidents of the Chamber of Deputies and the Senate of the validation of the macroeconomic trend framework of the Dfp 2026 that the MEF has drawn up by transposing the findings transmitted by the UFB on 26 March. The UPB validated the framework as being 'within an acceptable range for the main macroeconomic variables'. The GDP forecast in the Mef's scenario falls within the range defined by the Upb panel in all years of the projections, except for the last, when it marginally exceeds it. The cumulative GDP increase between 2026 and 2029, at 2.8 percentage points, lies between the median and the upper bound of the panel's values. "The international scenario is exposed to very high risks and the forecasts could be revised, even significantly, within a short interval of time," the Upb emphasised.
