OECD trims Italy’s GDP outlook: +0.6% in 2025, +0.7% in 2026
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The OECD has once again revised downward Italy’s economic growth forecasts. GDP is now expected to grow by just 0.6% in 2025 (down from 0.7%) and 0.7% in 2026 (down from 0.9%). The latest Economic Outlook also trimmed global growth projections to 2.9% for both 2025 and 2026.
Despite weak growth, Italy has made stronger-than-expected progress in cutting its deficit, which dropped to 3.4% of GDP in 2024, well below the government’s forecast and sharply down from 7.2% in 2023. The deficit is projected to fall to 3.1% in 2025 and 2.8% in 2026, below the EU’s 3% threshold. Public debt is also set to decline, easing to 135% of GDP this year and 134.5% by 2026.
Unemployment is expected to edge down to 6.1% in 2025, holding steady after a drop from 6.5% in 2024. Italian exports, however, are likely to stagnate due to tighter global trade conditions. On the upside, OECD notes that investment may benefit from faster implementation of the EU-funded PNRR, which could also boost employment in the medium term. To improve living standards, the OECD urges Italy to expand training opportunities for both young people and older workers to better align skills with labor market needs.
Globally, the OECD forecasts 2025 growth of 1.1% for the U.S., 1.7% for the euro area, and 4.5% for China.
Despite weak growth, Italy has made stronger-than-expected progress in cutting its deficit, which dropped to 3.4% of GDP in 2024, well below the government’s forecast and sharply down from 7.2% in 2023. The deficit is projected to fall to 3.1% in 2025 and 2.8% in 2026, below the EU’s 3% threshold. Public debt is also set to decline, easing to 135% of GDP this year and 134.5% by 2026.
Unemployment is expected to edge down to 6.1% in 2025, holding steady after a drop from 6.5% in 2024. Italian exports, however, are likely to stagnate due to tighter global trade conditions. On the upside, OECD notes that investment may benefit from faster implementation of the EU-funded PNRR, which could also boost employment in the medium term. To improve living standards, the OECD urges Italy to expand training opportunities for both young people and older workers to better align skills with labor market needs.
Globally, the OECD forecasts 2025 growth of 1.1% for the U.S., 1.7% for the euro area, and 4.5% for China.