Economic Bulletin No. 1 - 2026

16 January 2026

The global economy continues to expand, but the high uncertainty is weighing on the outlook

The US economy continued to grow markedly in the third quarter of 2025. As in the first half of the year, investment in AI-related technology made a significant contribution, fuelling international trade. In 2026, the OECD expects a slight weakening of global growth, which is subject to downside risks due to trade and geopolitical tensions and to the potential adjustments in the financial markets in the technology sector.

Euro-area GDP growth remains moderate

Euro-area GDP accelerated slightly in the summer months, with very uneven dynamics across the main countries. According to our estimates, GDP grew moderately in the autumn, driven especially by the further increase in activity in services. Last December, the Eurosystem staff macroeconomic projections revised euro‑area GDP growth upwards, to 1.2 per cent this year and to 1.4 per cent in the two years 2027-28. Consumer price inflation, which averaged 2.1 per cent in 2025, is expected to decline slightly in both 2026 and 2027, and then to return to 2.0 per cent in 2028.

Economic activity in Italy expands at a modest pace

Italy's GDP increased slightly in the third quarter, owing to the sharp rise in exports and to the expansion in investment. Household consumption grew modestly. According to our estimates, economic activity continued to expand moderately in the fourth quarter, driven by services and by a recovery in industry. The prospects for manufacturing remain uncertain, partly because of more intense competition from China in several sectors. According to our December projections, GDP will grow by 0.6 per cent in 2026, and then strengthen in the two years 2027-28.

The current account surplus remains ample

Following the decline in the spring, export volumes returned to growth in the third quarter, in part as a result of exceptional developments in some sectors. The current account surplus remained large between July and September. Net purchases of Italian government securities by foreign investors continued at a slower pace. The positive net international investment position widened.

Employment starts to increase again

Headcount employment returned to growth in the autumn months. The unemployment rate decreased further, while labour market participation declined among young workers.

Inflation remains subdued

Inflation was lower than in the euro area in the fourth quarter of 2025, reflecting a more moderate growth in the prices of services and a steeper drop in energy prices. Producer price pressures continue to ease. According to our December projections, consumer price inflation will decline to 1.4 per cent in 2026, from 1.7 per cent last year; it will gradually pick up again in the following two years, nearing 2 per cent on average in 2028.

Growth in lending strengthens

The cost of bank funding and the lending rates remained broadly unchanged in the autumn. Lending to households and firms accelerated. Looking at the breakdown by economic sector, loans to service firms recorded stronger growth and lending to construction firms turned positive, while the contraction in loans to manufacturing firms eased.

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