ROME, Nov. 11 (Xinhua) -- Italy's National Institute of Statistics (ISTAT) on Wednesday raised its economic growth forecast for 2026 but lowered its outlook for 2027, as rising prices and fading public stimulus are expected to slow consumption and investment.
The institute now expects gross domestic product (GDP) to expand by 0.9 percent this year and 0.6 percent next year, revising its June forecasts up by 0.2 percentage points and down by 0.1 percentage points, respectively.
Stronger-than-expected investment helped lift this year's outlook. Domestic demand is expected to remain the main driver of growth across both years, although its contribution will weaken.
Household consumption, including spending by non-profit institutions serving households, is projected to grow by 1 percent in 2026 and 0.6 percent in 2027. ISTAT said rising prices were weighing on purchasing power, with households drawing on savings to support spending.
Investment growth is forecast to slow from 2.9 percent this year to 1 percent next year as public stimulus measures are scaled back. Geopolitical uncertainty and higher energy costs could also prompt companies to postpone or reduce investment plans, the institute said.
Employment growth, measured in full-time equivalent units, is expected to ease from 0.9 percent in 2026 to 0.5 percent in 2027, while unemployment is projected to fall slightly from 6 percent to 5.9 percent.
ISTAT said risks to the outlook remained tilted to the downside, with persistent geopolitical tensions potentially renewing inflationary pressures through supply constraints and logistical disruptions. ■