Italy ekes out modest growth in Q1 as risks loom ahead

Italy's economy grew by 0.2% in Q1 2026, slightly above expectations, following a 0.3% rise in Q4 2025. Year-on-year, GDP expanded by 0.7%. The growth was driven by trade, despite a decline in domestic demand. The government revised its growth outlook down to 0.6% for this year and next, citing rising energy prices and geopolitical tensions. The conflict in the Middle East is expected to impact future growth, with a forecast of 0.5% "acquired growth" for the year.