Italian Prime Minister Giorgia Meloni said Italy’s economy could grow 1% this year, matching the Eurozone’s overall pace and possibly even slightly exceeding it. The forecast is notably more optimistic than the 0.6% official target her government set in April, and also above the 0.9% estimate released last month by Italy’s Parliamentary Budget Office (UPB).
In an interview with the newspaper Il Foglio published Saturday, Meloni said first-half economic data support the more upbeat outlook. “The Italian economy is performing solidly, and first-half data suggest growth in 2026 could reach 1%, a level in line with the Eurozone, and possibly even above it,” she said.
Official statistics show Italy’s GDP rose 0.3% quarter-on-quarter in the first quarter and a further 0.2% in the second. By the end of June, the so-called “carry-over” growth rate had already reached 0.8%, meaning that even if the economy completely stalled in the second half of the year, full-year output would still be 0.8% higher than in 2025. That provides a fairly solid foundation for full-year growth approaching 1%.
Structural Challenges Remain
Meloni acknowledged that Italy has long struggled to achieve sustained and stable expansion. She cited high energy costs and weak productivity as the main drags, and said the government is addressing them, though results will only become visible over the medium term.
Looking back, Italy’s economy grew just 0.5% for all of 2025. More notably, growth has not breached the 1% threshold in any of the past three years, even as the European Union has continued to inject tens of billions of euros in post-pandemic recovery funds. That makes Meloni’s 1% target—if achieved—the first time in nearly four years the country would reach that level.
Meloni’s decision to signal a more positive growth outlook at this juncture carries significant policy weight. The Italian government is under pressure to draft its autumn budget, and a higher growth forecast helps lower projected deficit and debt ratios, creating more fiscal room for maneuver.
Market participants note that if Italy can keep pace with the Eurozone average, it would help ease investors’ long-standing concerns about the country’s high debt burden. The spread between Italian and German government bonds has long served as a key barometer of risk in Eurozone peripheral countries, and improved growth momentum could exert downward pressure on that spread.
That said, the two structural problems—energy costs and productivity—are unlikely to be reversed in the short term. Meloni herself conceded that the effects of related reforms will only materialize over the medium term, meaning growth momentum in the coming quarters will still depend on the external environment and the effective deployment of EU funds.