Note on Italian economy - November-December 2024

The global economic outlook remains positive for 2025, with a narrowing of growth differentials between the U.S. and the euro area. However, significant uncertainty persists, driven by ongoing geopolitical tensions and expectations regarding the direction of U.S. trade policy.

In Italy, the industrial production index in November showed the second consecutive month-on-month increase, slightly accelerating compared to October. Growth affected all significant sectors except capital goods. The quarterly moving average trend of the index remains negative.

In the first ten months of 2024, export values showed a slight decline due to a reduction in export volumes that outweighed the increase in average unit values. The trade balance improved significantly during the same period, exceeding 45 billion euros.

In November, compared to October, the number of employed and unemployed individuals decreased, while inactive individuals increased. Italy’s unemployment rate (5.7%) was lower than that of the euro area (6.3%).

The decline in employment reflects mixed trends: a reduction in men, temporary employees, and individuals aged 15-34, while women, permanent employees, and those aged 35 and older increased. Compared to the previous quarter, there was a 0.2% rise in employment (+49,000 units).

Inflation in Italy remains below the euro area average. In December, the Harmonized Index of Consumer Prices (HICP) increased by 1.4% year-over-year. The annual average rate dropped significantly to 1.0% compared to 5.7% in 2023.

In the third quarter of 2024, the recovery in household purchasing power continued, albeit at a more moderate pace (+0.4%, compared to +1.1% in the second quarter). The growth in final consumption was more dynamic, supported by a decline in the saving propensity.

Consumer confidence worsened for the third consecutive month in December, while business confidence rebounded after two straight declines driven by the market services sector.