From Yahoo Finance: 2025-04-22 16:17:00

Italy’s economy grew by 0.7% in 2023 and 2024, below its 1% potential. The US is a key export market for Italian goods, with a bilateral trade surplus of EUR 39bn. A potential trade war could lower Italy’s growth by 0.5-1pp. Recovery funds are essential for sustaining growth.

Italy’s goods exports to the US totaled EUR 65bn in 2024. The impact of US tariffs on Italy remains uncertain. The country must diversify export markets. Efficient use of EU recovery funds is crucial. Italy has received EUR 122.1bn of the allocated EUR 194.4bn, but spending remains a challenge.

Lower-than-expected spending of recovery funds has diminished economic stimulus. Most impact now expected in 2025-26. Italy must allocate remaining funds wisely. Structural reforms are planned by 2026 to support growth potential. High public debt remains a concern at 135.3% of GDP.

Italy’s economic growth potential of 1% relies on planned structural reforms. Recovery funds and trade diversification are crucial for sustaining growth. The impact of US tariffs and slow fund absorption on Italy’s near-term growth is a concern. Structural reforms are needed to support growth potential and reduce public debt.

Read more: US Tariffs and Slow EU-fund Absorption Weaken Near-term Growth