Italy’s economy expanded by 0.7% in 2024, driven by domestic consumption and rising exports, according to national statistics office Istat. The figure exceeded the Bank of Italy’s 0.5% forecast but fell short of the government’s 1% target.
Compared to its European neighbors, Italy’s GDP growth outpaced Germany’s 0.2% contraction but lagged behind France’s 1.1% expansion. The increase was mainly fueled by consumer activity, with household spending rising 0.4% year-on-year and government expenditure increasing by 1.1%. Net external demand also played a role, as exports grew by 0.4% while imports declined by 0.7%.
Among sectors, agriculture, forestry, and fishing posted the highest growth at 2%, followed by construction (+1.2%) and services (+0.6%). Meanwhile, mining, manufacturing, and other industries recorded a slight decline of 0.1%. Manufacturing remains under pressure, with the latest HCOB Italy Manufacturing Purchasing Managers’ Index rising from 46.3 in January to 47.4 in February—still signaling contraction.
Rome made significant progress in reducing its budget deficit, which fell sharply to 3.4% of GDP in 2024 from 7.2% the previous year. General government net borrowing amounted to €75.5 billion.
Italy remains committed to lowering its deficit below 3% of GDP by 2026 to align with EU fiscal rules, with plans to reduce it further to 3.3% in 2025. However, despite the deficit reduction, public debt increased slightly to 135.3% of GDP from 134.6% in 2023.
