Italy ekes out modest growth in Q1 as risks loom ahead
Italy's economy grew by 0.2% in the first quarter of 2026 compared to the previous quarter, slightly above expectations, driven by trade flows despite declining domestic demand. Year-on-year growth was 0.7%, down from a revised 0.9% in the prior quarter, with services expanding while industry and agriculture contracted. Geopolitical tensions and rising energy prices have prompted the government to lower its growth forecasts for the coming years, anticipating continued subdued economic expansion.
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ROME, April 30 (Reuters) - The Italian economy grew slightly more than expected in the first quarter from the previous three months, preliminary data showed on Thursday, with turmoil in the Middle East casting a shadow over future prospects. Gross domestic product in the euro zone’s third-largest economy rose 0.2% quarter-on-quarter, following a 0.3% increase in the October-to-December period, national statistics bureau ISTAT said. The main impact of the conflict in Iran, which began with US/Israeli strikes on February 28, are expected to be felt from the second quarter. On a year-on-year basis, the Italian economy expanded by 0.7% between January and March after a 0.9% increase in the fourth quarter, which was revised up from a previously reported 0.8% reading.
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