Note on Italian economy - July - August 2026

Global economic divergences narrowed in the second quarter. In the United States, GDP growth slowed but remained robust, supported by consumption and investment in AI; in the euro area, the economy rebounded after the first three months of stagnation; China, by contrast, showed signs of deceleration.

The international outlook remains uncertain; the ongoing conflicts, especially between the United States and Iran, continue to negatively affect the global supply chains.

In Italy in the second quarter, gross domestic product growth of 0.2 per cent compared with the previous three months was confirmed, driven by private consumption and investments. The expansion phase that began in the third quarter of 2025 thus continues. The projected growth rate for 2026 stands at 0.8 per cent.

Industrial production returned to growth. Following the two declines recorded in May and June (-0.2% and -1.1% month-on-month, respectively), the seasonally adjusted industrial production index increased by 0.7% in July compared to the previous month

In July, the number of people in employment remained broadly unchanged at 24,370,000. This figure reflects an increase amongst men and those aged 35–49, offset by a decrease amongst women and in all other age groups. On a month-on-month basis, the overall unemployment rate – which remained stable at 6.4 per cent in the euro area – fell to 5.8 per cent.

Energy prices are fueling a rise in inflation: according to preliminary estimates, in August the Harmonised Index of Consumer Prices (HICP) rose by 3.2 per cent year-on-year (+3.3 per cent in the euro area), up from 2.9 per cent in July.

Focus: Between 2021 and 2026, the Italian labour market showed a positive trend, with a rise in the employment rate and a fall in unemployment. Employment growth mainly concerned the 50–64 age group (+7.8 percentage points), driven by the population’s progressive ageing and pension reforms. In terms of employment contracts, stable employment is becoming more established, with an increase in permanent staff and a parallel reduction in those on fixed-term contracts.