Italy's Q1 2026 GDP rises modestly as inflation climbs to 3.1%

Italy's gross domestic product grew by 0.3% in the first quarter of 2026 on a quarterly basis, while the annual growth rate stands at 0.6%. The increase contrasts with a 0,2% contraction in the euro‑area overall. Industrial production fell 0,3% in May, ending three months of gains, though the March‑May average showed a 0,9% rise.

Employment slipped to 24.336 million in May, affecting all age groups except those over 50, and the unemployment rate fell slightly to 5,0% from 5,1% in April, while the euro‑area rate remained at 6,2%. The harmonised consumer price index rose 3,1% in June, surpassing the euro‑area average of 2,8% and marking the first time since October 2023 that Italy’s inflation exceeded the bloc’s level. Profit margins across sectors, especially agriculture and manufacturing, have begun to shrink as variable costs outpace price increases.

These figures highlight persistent pressures from global energy shocks and higher labour costs, even as the country benefits from reduced energy prices and a modest improvement in the geopolitical environment.