Note on Italian economy - November - December 2025

In the final months of 2025, the easing of trade tensions and interest rate reductions diminished uncertainty and enhanced liquidity, thus partially mitigating the downward pressure on global economic growth. The start of 2026 was characterised by new episodes of instability, reinforcing projections of a slowdown in global economic activity for the current year.

In Italy, the latest high-frequency data indicate a general slowdown in economic activity in October, following a prior recovery in September. In the third quarter of 2025, GDP increased by 0.1%. This indicates weak growth in the Italian economy relative to the euro area average, with varied performance across sectors.

The economic performance of trade during the August-October period was modest overall, with exports and imports rising by 0.3% and 0.2%, respectively. In the first 10 months of the year, exports increased by 3.4% year-on-year, while domestic imports rose by 3.7%, indicating significant sectoral disparities.

Employment experienced a decline in November on a quarterly basis; however, it showed an increase compared to November 2024. This quarterly reduction affected only women across all age groups, except those aged 25-34. Overall, the September-November period reflected a modest quarterly increase in employment (+0.3%, totalling +66,000 employed individuals), while the number of job seekers decreased.

In December, the Harmonised Index of Consumer Prices (HICP) experienced a year-on-year increase of 1.2% (+1.1% in November), significantly below the average for the euro area (+2.0%; +2.1% in November). For the entire year, inflation in Italy was 1.7% (+1.1% in 2024), compared with 2.1% (+2.4% in 2024) in the euro area. Household purchasing power experienced an increase in the third quarter.

Focus: the Italian pharmaceutical sector is currently experiencing robust dynamism, significantly outperforming the manufacturing sector in both production and trade. From January to October 2025, pharmaceutical exports increased by an average of 33.7%, while imports rose by 44.6%, increasing the sector’s share by over 10% of total national trade. The United States has emerged as a pivotal player in Italy’s export growth, becoming its main trading partner. The sector is characterised by a substantial presence of foreign-controlled multinational companies, which play a critical role in exports.