Istat revised Italy's Q1 GDP growth to 0.3% quarter-on-quarter, up from a prior
0.2% estimate and matching Q4 2025. Consumption, investment and trade all showed
improvement. The government lost a judicial reform referendum last month and
2025's fiscal deficit exceeded the EU 3% limit. Growth momentum from 2025 was
later hit by a Middle East conflict linked to Iran, which pushed up fuel costs
and dented confidence, prompting the government to lower its growth forecasts.
Bank of Italy Governor Panetta said activity is expected to remain weak in
coming months and “in the worst case the economy could stagnate or contract.”
