This is reported by Finway
The Italian government is preparing to revise its economic growth forecast downward in light of a significant increase in fuel prices caused by the war in Iran. This decision is influenced by external temporary factors, primarily the energy crisis.
Reasons for Revising Economic Forecasts
Italy’s Minister of Economy Giancarlo Giorgetti emphasized that the negative adjustments are limited and mainly related to the unstable situation in energy markets. According to available data, there are no structural changes observed in the country’s economy.
“The deterioration of the economic growth forecast is limited and primarily associated with external temporary factors, including the energy crisis,” Giorgetti said.
The Italian government is expected to lower the GDP growth forecast for 2026 from 0.7% to 0.6% or even 0.5%. The forecast for the following year is also being revised from 0.8% to 0.6–0.7%. This reduction will complicate the task of bringing the budget deficit back to 3% of GDP by 2026, as required by the European Union, considering that last year this figure was 3.1%.
Position of the Italian Government and the Situation in the EU
Giorgetti believes that in the event of a new large-scale escalation of the U.S.-Israeli war against Iran, the European Union should temporarily ease fiscal requirements regarding national budget deficits.
At the same time, Italian Prime Minister Giorgia Meloni is making efforts to update the government’s political course following the defeat in the recent referendum on judicial reform. One of the reasons for the failure was the rise in energy prices and her connections with U.S. President Donald Trump.