FX.co ★ Italian GDP Expands for 4th Quarter

Italy’s GDP grew by 0.2% in the second quarter of 2026, down from 0.3% in the previous quarter and in line with the preliminary estimate. This marked the fourth consecutive quarter of expansion for the Italian economy, despite significant headwinds in the June quarter as the outbreak of war in the Middle East triggered a global energy shortage and pushed up borrowing costs.

Household consumption rose by 0.4% quarter-on-quarter, more than offsetting a 0.1% decline in government spending as Rome moved to rein in expenditure to comply with EU fiscal rules. Gross fixed capital formation increased by 0.3%, with a 7.4% surge in non-residential investment more than compensating for a 7% drop in residential construction.

By contrast, net exports weighed on growth: exports rose by 0.8%, while imports increased by 1.7%, reflecting higher energy purchases from abroad at elevated prices. Assuming zero growth in the remaining quarters of the year, Italy’s GDP was on track to expand by 0.8% in 2026.