Italian Prime Minister Giorgia Meloni expects Italy’s economy to grow by 1% this year, raising the prospect of a stronger-than-forecast performance after years of weak expansion.
In an interview with newspaper Il Foglio published Saturday, Meloni said economic data from the first half of 2026 suggested that annual growth could reach 1%, broadly matching or potentially exceeding growth across the euro zone.
“The Italian economy is holding up well, and data from the first six months of the year could point to 2026 growth of 1%, in line with, if not above, that of the euro zone,” Meloni said.
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Her projection is more optimistic than the Italian government’s official forecast. In April, Meloni’s government estimated that gross domestic product would expand by 0.6% in 2026. The country’s budget watchdog, UPB, subsequently raised its forecast to 0.9% last month.
The latest GDP figures provide some support for Meloni’s more bullish assessment. Italy’s economy expanded 0.3% quarter-on-quarter in the first three months of the year and another 0.2% in the second quarter.
By the end of June, Italy had already accumulated “acquired growth” of 0.8%. That measure means the economy could record no growth at all in the final two quarters of the year and still expand 0.8% for the full year compared with 2025.
The figures therefore leave Italy within reach of the 1% threshold, although achieving Meloni’s target would require additional expansion during the second half of the year.
Italy Still Faces A Structural Growth Problem
Meloni acknowledged that stronger near-term data do not resolve Italy’s longer-running growth problems.
“It is also true that the Italian economy has struggled for many years to achieve sustained and steady growth,” she said, pointing to high energy costs and low productivity as two of the factors weighing on the economy.
Her comments highlight the distinction between Italy’s current cyclical performance and its broader structural challenge. A 1% expansion would represent an improvement, but it would not by itself mark a decisive break from the country’s prolonged period of sluggish growth.
Meloni said her government was working to address those problems, while acknowledging that the results would take time to emerge.
“We are working to address these issues, but the results of those efforts will only become visible over the medium term,” she said.
Italy’s economy grew just 0.5% in 2025. It has not recorded annual growth above 1% in the past three years, even as the country received tens of billions of euros in European Union COVID-19 recovery funds. That record puts Meloni’s latest forecast in perspective. Reaching 1% growth in 2026 would be Italy’s strongest expansion in several years, but it would still leave the economy growing at a relatively modest pace.
The reliance on EU recovery funds also underscores the difficulty Italy faces in converting large-scale public investment into sustained productivity growth. The government’s immediate challenge is to maintain the momentum seen in the first half of the year, while its longer-term challenge is to lift the economy’s underlying growth potential.
Meloni’s comments suggest the government sees the current data as evidence that Italy is beginning to perform better than expected. But her acknowledgment of energy costs and weak productivity indicates that Rome does not view the latest improvement as sufficient to solve the country’s deeper economic constraints.
Currently, the 1% target represents a modest but meaningful upgrade from the government’s original 0.6% forecast. It is not clear if Italy can sustain that pace, with economists suggesting that it depends not only on the second-half performance but also on whether the success of the structural reforms Meloni points to can eventually translate into higher productivity and more durable growth.