Rolling coverage of the latest economic and financial news Italy’s economy grew more than first estimated at the start of the year, according to its national statistics office. Italian GDP rose 0.3% in the first three months of the year, instead of an initial estimate of 0.2%. The detail shows that the pick-up in growth was led by households’ demand, with growth in households’ consumption picking up to 0.5% quarter-to-quarter, from 0.1% in Q4 last year. Otherwise on the domestic front, government spending was flat, after having grown 0.2% on the quarter previously. Fixed asset investment, meanwhile, grew by 0.7% on the quarter—weaker than 1.0% quarterly growth in Q4 2025, but still relatively strong overall. Higher energy prices will also constrain output in the manufacturing sector. Admittedly, fiscal support being provided to households through the energy shock so far will help soften the blow to consumption, but we expect to see weaker growth in household spending this quarter nevertheless. Furthermore, any boost to growth from recent reforms to Italy’s energy market—which aim to bring Italian natural gas prices in line with the Dutch TTF benchmark— will be more than reversed by the energy shock. Continue reading...

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