Italy's Economy Surpasses Expectations with 0.3% Growth in Q4 2025

Italy's Economic Performance in Q4 2025

ROME, Jan 30 (Reuters) - The Italian economy grew by 0.3% in the fourth quarter of last year from the previous three months and was up 0.8% year-on-year, data showed on Friday, a stronger reading than expected which bolsters the outlook for this year.

Quarterly Growth Analysis

A Reuters survey of 28 economists had forecast a 0.2% rise quarter-on-quarter and an increase of just 0.5% year-on-year.

Yearly Growth Projections

Over the whole of 2025, the euro zone's third largest economy grew by 0.7% from the year earlier, when adjusted for the number of working days, national statistics bureau ISTAT reported.

Factors Influencing Growth

It will release on March 2 non-workday-adjusted growth data for last year, comparable with the government's 0.5% target.

There were three fewer days worked last year than in 2024, so the March 2 data may show lower growth than the figure released on Friday.

ISTAT said so-called "acquired growth" going into 2026 stood at 0.3%, meaning that even if GDP is flat in each of the four quarters of this year, full-year growth will be up 0.3% from the year earlier.

Italy's government has set a full-year growth target of 0.7% for this year.

The 0.3% quarter-on-quarter growth between October and December was the result of higher domestic demand which more than offset a negative contribution from trade flows, ISTAT said.

It gave no numerical breakdown of components with its preliminary estimate, but said industry, services and agriculture had all expanded.

In the July-to-September period the economy grew by 0.2% quarter-on-quarter, ISTAT said, revising up an originally reported 0.1% increase, while the year-on-year data was confirmed at 0.6%.

(Reporting by Antonella Cinelli, graphic by Stefano Bernabei, editing by Gavin Jones)