Italian GDP was flat in the third quarter, following growth of 0.2 per cent in the second and 0.3 per cent in the first. Services and agriculture expanded while industry contracted. Domestic demand, including inventories, contributed positively, but foreign demand weighed on activity. Annual output growth was 0.8 per cent in the preliminary estimate.
Economics & Markets··Evening
Quarterly growth gives way to stagnation
Italy’s economy recorded no quarterly growth in the third quarter, following increases of 0.3 per cent in the first and 0.2 per cent in the second. Output remained 0.8 per cent above its year-earlier level. The preliminary estimate from Istat, Italy’s national statistics institute, was released the preliminary estimate on 30 October. The calculation uses chain-linked volumes and adjusts for seasonal and calendar effects. Analysts had expected an increase of between 0.1 per cent and 0.2 per cent over the preceding quarter.[1], [2]
The quarter contained four more working days than the previous three months and one more than the corresponding period of 2025. Across the full year, the calendar contains three more working days than in 2025. The annual growth rate had been 1.0 per cent in the second quarter.[1]
Industry declines as domestic demand adds support
Services and agriculture increased their value added, while industry contracted. On the expenditure side, domestic demand including inventory changes contributed positively to growth. Net foreign demand had a negative contribution. The calendar-adjusted carry-over growth rate remained at 0.8 per cent: that is the annual increase obtained if output in the final quarter stays at its third-quarter level.[1]
The provisional chain-linked series, referenced to 2020, placed output at 494,112 million euros, compared with 494,027 million euros in the second quarter. Growth rates are published on a rounded basis. Istat revised the series from the first quarter of 2022 under its normal revision policy. Incomplete short-term indicators at this stage require greater use of statistical techniques, leaving the preliminary calculation open to larger subsequent revisions.[1]
Consumer representative calls for budget changes
Massimiliano Dona, president of the Italian consumer organisation Unione Nazionale Consumatori, described the stagnation as serious and worrying. He argued that services growth had failed to compensate for declining industry. Dona criticised the resources devoted to growth in the government’s budget and urged parliament to amend it. He said income-tax changes, earlier retirement, payments for newborn children and a flat-tax increase would not raise GDP. Maria Cecilia Guerra, a member of the lower house’s budget committee, also criticised the government’s budget as the national recovery programme approached its end.[2]
