Italy economy at a glance

Latest figures for Italy: inflation, growth, interest rates, jobs, bond yields, debt and taxes. Updated 6 November 2026. Open Italy on the interactive map →

Key figures

Indicator	Latest	Period	Previous
Inflation (consumer prices, year on year)	5.6%	October 2026	4.2% September 2026
Core inflation (excluding food and energy)	2.3%	October 2026	1.9% September 2026
Real GDP growth (year on year)	0.8%	Q3 2026	1.0% Q2 2026
Policy rate (European Central Bank)	2.50%	November 2026	2.50% October 2026
Unemployment rate	6.3%	September 2026	6.2% August 2026
10-year government bond yield	4.36%	September 2026	3.99% August 2026
Manufacturing PMI (HCOB / S&P Global Italy Manufacturing PMI)	49.4	October 2026	50.4 September 2026
Retail sales (year on year)	−0.5%	August 2026	−0.9% July 2026
Industrial production (year on year)	0.0%	August 2026	−0.1% July 2026
Wages (year on year)	2.5%	Q3 2026
House prices (year on year)	4.0%	Q2 2026	5.1% Q1 2026
Stock market (FTSE MIB)	50,506	November 2026	+16.5% over 12 months

Questions and answers

What is the inflation rate in Italy?

Italy's annual inflation rate was 5.6% in October 2026, up from 4.2% in September 2026.

What is the interest rate in Italy?

The European Central Bank deposit facility rate is 2.50% (as of November 2026). The next rate decision is due on 17 December 2026.

How fast is Italy's economy growing?

Italy's real GDP grew 0.8% year on year in Q3 2026. The IMF's October 2026 World Economic Outlook forecasts growth of 0.8% in 2026 and 0.6% in 2027.

What is the unemployment rate in Italy?

Italy's unemployment rate was 6.3% in September 2026, up from 6.2% in August 2026.

What is Italy's 10-year government bond yield?

Italy's 10-year government bond yield averaged 4.36% in September 2026.

How much government debt does Italy have?

Italy's government debt is about 137.1% of GDP (latest annual figure), with a budget deficit of 3.1% of GDP.

What is Italy's credit rating?

Italy's sovereign credit ratings: S&P BBB+, Moody's Baa2, Fitch BBB+.

What is the VAT rate in Italy?

Italy's standard VAT rate is 22% (2026 rules).

What is the corporate tax rate in Italy?

Italy's corporate income tax rate is 27.8% (2026 rules).

Who leads Italy?

Italy is led by Prime Minister Giorgia Meloni (Brothers of Italy), heading a right-wing coalition with the League and Forza Italia; President Sergio Mattarella (head of state). Next election: General election due by end-2027.

Outlook

The government's October 2026 budget framework raised its 2026 growth forecast to 1.0% (from 0.6%) and sees 0.8% in 2027, while the IMF's October WEO is slightly more cautious at about 0.8% for 2026. On the downside, inflation of 4.2%, further ECB hikes and higher BTP yields squeeze households and debt service, and the fiscal plan lets the headline deficit rise to 3.4% of GDP in 2027 with debt edging up to about 138.5% of GDP. On the upside, political continuity and S&P's positive outlook could bring further rating upgrades and tighter spreads.

Why Italy matters for the world economy

Italy is the euro area's third-largest economy and its largest sovereign bond market, so BTP yields and the BTP-Bund spread are a main channel through which ECB tightening and fiscal worries spread to southern Europe and to euro-area banks. As Europe's second-largest manufacturer it supplies machinery, components, pharmaceuticals and consumer goods mainly to Germany, the US and France (together about a third of goods exports in 2025), so its industrial cycle is closely tied to German demand and to US tariff policy. As a heavy importer of gas and oil it is among the economies most exposed to the 2026 energy shock, which lifted its HICP inflation to 4.2% in September and is driving extra borrowing for energy relief under the EU's national escape clause.

Politics

Meloni's coalition, in office since October 2022, became Italy's longest-lasting government since the Second World War on 3 September 2026, and that continuity has been cited in the 2025 rating upgrades. Its momentum has faded: voters rejected its flagship justice reform in a March 2026 referendum and a new far-right party led by Gen. Roberto Vannacci is competing for its voters. Fiscally, Italy remains in the EU excessive-deficit procedure after a 3.1% deficit in 2025, and the 2027 budget is built around a roughly EUR 29bn deviation for energy support and defence that parliament approved on 13 October.

System: Unitary parliamentary republic.

Economy and taxes

GDP: US$2,552 billion
Population: 58.9 million
Government debt: 137.1% of GDP
Budget balance: −3.1% of GDP
Current account: 0.7% of GDP
Exports: 32.2% of GDP
Main exports: Machinery and equipment, pharmaceuticals, motor vehicles and parts, fashion and leather goods, food and wine, metals
Top export markets: Germany (11.2%), United States (10.8%), France (10.1%), Spain (5.9%), Switzerland (5.5%)
IMF growth forecast: 0.8% in 2026, 0.6% in 2027
IMF inflation forecast: 3.3% in 2026, 2.8% in 2027
Currency: EUR
Freelancer tax: A self-employed person earning the average wage (EUR 34,733 a year) pays about 43.4% of it in income tax and social contributions (2026 rules)
Top income tax rate: 47.2%
Gold reserves: 2,451.8 tonnes (August 2026)
Energy self-sufficiency: 15% (2024)

Recent news

30 October 2026 Italian economy stalls in the third quarter as industry shrinks Istat
Istat's preliminary estimate shows GDP unchanged from the second quarter and 0.8% higher than a year earlier. Services and farming grew while industry shrank, and domestic demand added to growth while net exports subtracted from it.
30 October 2026 Italian inflation leaps to 5.6% as regulated energy bills soar Istat
Italy's harmonised inflation rate jumped to 5.6% in October from 4.2%, Istat's flash estimate shows, with prices up 1.2% in a single month. Regulated energy prices were 59.5% higher than a year earlier after an 18.8% monthly rise, and unprocessed food also got dearer.
28 October 2026 Cabinet approves a EUR 26bn 2027 budget with tax cuts for middle earners Italian Government
Meloni's cabinet approved a 2027 budget worth about EUR 26bn, extending the 33% income-tax rate to earnings up to EUR 55,000, adding EUR 3.4bn for health and boosting family benefits. It is funded mainly by budget clauses and higher revenue from the financial, gaming and energy sectors.
22 October 2026 Italian 10-year yield climbs to 4.62%, close to its 2023 peak QuiFinanza
The BTP-Bund spread opened at 122 basis points, its widest in almost two years, as a global bond sell-off, oil above $110 and France's fiscal crisis lifted European yields. French 10-year yields, at about 5.05%, remain above Italy's.
19 October 2026 Cost-of-living protest in Milan turns into two days of rioting and looting Il Post
Masked groups broke away from a student-organised march against rising prices on 17-18 October, looting shops in central Milan and clashing with police; more than 270 people, most of them minors, were stopped. Milan's mayor and the interior minister then clashed over policing.
16 October 2026 Italian harmonised inflation jumps a full point to 4.2% in September Eunews / Eurostat
Eurostat's final data showed Italy's HICP rate rising from 3.2% in August to 4.2%, up from 1.7% a year earlier, as energy costs fed through; euro-area inflation reached 3.8%.

Headlines and summaries are compiled daily from the linked reports with AI assistance.