Italy's economy unexpectedly stalled in the third quarter of 2026, with GDP remaining unchanged q/q, following 0.2% growth in the previous quarter. On an annual basis, GDP increased by 0.8%, pointing to a relatively modest pace of economic expansion.
On the supply side, services and agriculture provided positive contributions to growth, while industrial activity declined. The weakness in industry remains a concern, particularly given the sector's importance to Italy's export-oriented economy.
On the demand side, domestic demand, including changes in inventories, supported economic activity, while net foreign demand acted as a drag. This suggests that domestic spending continues to provide some resilience, but external demand and trade flows remain a source of weakness.
The carry-over growth rate for 2026 stands at 0.8% on a calendar-adjusted basis. This means that even if GDP remains unchanged in the fourth quarter, annual growth would still be around 0.8%, although the final annual figure may differ due to the three additional working days in 2026 compared with 2025.
The report is mildly negative for the growth outlook. The stagnation in quarterly GDP, combined with industrial weakness and a negative contribution from net exports, highlights structural growth challenges. Domestic demand remains the main source of resilience, but the economy is still struggling to generate broader-based growth.
This article was written by Giuseppe Dellamotta at investinglive.com.
Source: Investing Live - News
