Italy GDP Growth Picks Up

The Italian GDP expanded by 0.3% from the previous quarter in the final three months of 2025, confirming the preliminary estimate released earlier and slightly ahead of the initial market expectations of a 0.1% expansion. The economy was supported by gross fixed investment in the period (0.9%), with housing (7.1%) offsetting non-residential capital formation (-1.8%). In the meantime, household consumption (0.1%) and government expenditure (0.2%) were both slightly higher. Net foreign demand contributed negatively to the GDP growth as imports rose by 1% and exports contracted by 1.2%, reflecting the impact of trade disputes with the US started by the tariffs from Washington. The GDP expanded by 0.5% in the full year, slightly below the Bank of Italy's forecast of 0.6%.

The Italian gross domestic product expanded by 0.3% from the previous quarter in the final three months of 2025, according to a preliminary estimate. The growth rate was above market expectations of a softer 0.2% and the 0.1% from the previous quarter, indicating some fresh traction in the Italian economy. Output expanded broadly across all sectors of the economy, with sharper rates seen in agriculture and industry. On the demand front, domestic expenditure was sharply higher, offsetting a negative impact from net foreign demand due to tariff turbulences with the US. On the year, the estimate reflects a 0.7% expansion in 2025, ahead of the Bank of Italy's forecast of a 0.6% rise.

The Italian gross domestic product expanded by 0.1% from the previous quarter on the three months to September of 2025, erasing the 0.1% contraction from the earlier period and revised higher from the preliminary estimate of a stall to meet the initial expectations by markets. Gross fixed investment expanded by 0.6%, as a 2.5% growth for plants and machinery offset a 1.4% contraction for residential construction. In the meantime, final domestic consumption inched 0.1% higher amid a 0.1% rise for private consumption and a 0.1% increase for government expenditure. In turn, net domestic demand contributed to a 0.5 percentage point increase in GDP growth as exports jumped 2.6% on the quarter and imports rose a softer 1.2%, aided by the reduction of aggressive tariffs from the United States during the period. The Italian GDP expanded by 0.6% annually in the third quarter and 0.5% in the first three quarters.