Finance
Italy's economy holds up in first quarter thanks to domestic demand
Published by Global Banking & Finance Review®
Posted on April 30, 2025
2 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 30, 2025
2 min readLast updated: January 24, 2026
Italy's economy grew by 0.3% in Q1 2025, driven by strong domestic demand, surpassing expectations and offsetting trade impacts.
By Gavin Jones
ROME (Reuters) -The Italian economy grew by 0.3% in the first quarter from the previous three months, preliminary data showed on Wednesday, a slightly stronger reading than expected thanks to positive domestic demand which offset a negative impact from trade flows.
On a year-on-year basis, first quarter gross domestic product in the euro zone's third largest economy was up 0.6%, national statistics bureau ISTAT said.
A Reuters survey of 28 economists had forecast a 0.2% rise quarter-on-quarter and a 0.4% increase year-on-year.
The data was greeted with relief by Giorgia Meloni's government, which this month halved its full-year 2025 growth forecast to 0.6% from a 1.2% target set in September, amid mounting uncertainty due to U.S. trade tariff policy.
Economy Minister Giancarlo Giorgetti said Italy had performed "better than other European countries," in an apparent reference to France and Germany, without elaborating.
Giorgetti said in a statement that the data showed Rome's latest forecasts were reliable and also demonstrated "the effectiveness of the government's economic policies."
Germany, the euro zone's largest economy, grew by 0.2% in the first quarter from the previous three months, while France, the bloc's second-largest economy, reported a marginal GDP increase of 0.1%.
Both readings were in line with analysts' expectations.
Italy's ISTAT gave no numerical breakdown of components with its preliminary first quarter estimate but said industry and agriculture had expanded, while services had stagnated.
The Bank of Italy has forecast Italian 2025 growth of just 0.5%, while the International Monetary Fund sees 0.4%.
Growth came in at 0.7% in each of the last two years.
ISTAT revised its previous data for the fourth quarter of last year to show a 0.2% quarter-on-quarter rise and a 0.5% year-on-year increase, previously reported at 0.1% quarter-on-quarter and 0.6% annually.
The statistics institute said the first quarter data provided a platform of 0.4% of so-called "acquired growth," indicating what the full-year 2025 growth rate would be if there were to be no quarterly growth over the rest of the year.
(Reporting by Gavin Jones, graphic by Stefano Bernabei)
The article discusses Italy's economic growth in Q1 2025, driven by domestic demand.
Italy's economy grew by 0.3%, outperforming Germany and France in Q1 2025.
Strong domestic demand offset negative trade impacts, leading to economic growth.
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