According to the report “Wars, duties, uncertainty: growth at risk” published in March 2026 by the Centro Studi Confindustria, the Italian economy is heading towards a stagnant 2026, with GDP growth revised down by 0.2 percentage points from previous estimates to a modest +0.5%. For 2027, the recovery remains subdued at +0.6%, insufficient to offset lost potential. This outlook reflects a combination of uncertainty generated by duties introduced by the United States in 2025 and the impact of the conflict in Iran on energy commodity prices.
The baseline scenario developed by the Centro Studi Confindustria assumes, optimistically, that the conflict will end by March 2026. Even under this assumption, however, the repercussions for Europe remain significant. The continent, heavily dependent on hydrocarbon imports, is exposed to the energy shock asymmetrically compared with the United States, which, as a net exporter of oil and gas, can access WTI crude at structurally lower prices, with an estimated gap of between 15 and 20 dollars compared with Brent. This divergence translates into a competitive advantage for North American companies at the expense of European firms, particularly Italian ones.
The impact on energy prices is immediate and measurable. Brent crude is expected to average 78 dollars per barrel in 2026, a revision upwards of 16 dollars compared with October estimates. European gas, within the same scenario, is projected to reach 41 euros per megawatt hour, up by 9 euros from previous forecasts. Only in 2027, as tensions gradually ease, are prices expected to return to more sustainable levels: 65 dollars per barrel for Brent and around 30 euros per megawatt hour for gas.
The surge in energy costs is feeding through into overall inflation at a concerning pace. The Centro Studi Confindustria forecasts an average rate of 2.5% for 2026, with an intra-year peak of 3%, compared with +1.5% recorded in 2025. The erosion of purchasing power is directly affecting household consumption, expected to grow by just 0.7%. Real incomes, net of inflation, will rise by a marginal +0.1%, insufficient to sustain robust spending. Households are responding by increasing precautionary savings, diverting resources away from domestic demand at a time when it is crucial to offset weak external demand.
Exports, in fact, remain subdued, with growth forecast at 0.6% in 2026, held back by slowing global demand and rising sourcing and transport costs. Gross fixed investment, which was still growing at +3.5% in 2025, is set to slow sharply: the report projects +2.3% in 2026 and a further deceleration to +1.3% in 2027. Uncertainty, combined with the phasing out of automatic incentives that supported the previous cycle, is dampening corporate capital expenditure decisions.
Adding to the complexity is the shift in European Central Bank policy. Contrary to expectations just a few months ago, the Centro Studi Confindustria now forecasts a 25 basis point rate increase by December 2026. The withdrawal of this monetary support adds to existing pressures, tightening credit conditions at a time when companies need greater financial headroom to manage the transition and sustain investment.
On public finances, the report points to relative resilience. The deficit is expected at 2.8% of GDP in 2026 and 2.7% in 2027, in line with European parameters. Public debt, however, will peak at 138.7% in 2026, driven by disbursements linked to building tax credits, before easing to 138% in 2027. The labour market, which had recently recorded historically positive results, is reversing course: the unemployment rate is set to rise from a low of 5.1% at the start of the year to 5.8% over 2026–2027.
In this context, the report identifies defence spending as one of the few available drivers of expansion in the short term. Alignment with NATO targets, implying an increase from the current 1.5% of GDP to 3.5%, is not seen merely as a budgetary burden but as an industrial policy lever. According to Centro Studi Confindustria estimates, in an optimistic scenario the fiscal multiplier of this spending could reach 2, generating positive spillovers in employment, innovation and industrial output. The report highlights that the resulting increase in nominal GDP could partly offset the impact of a higher deficit, turning a geopolitical constraint into an opportunity for technological development in national industry.
The second driver identified by the Centro Studi Confindustria is the PNRR. With the withdrawal of automatic incentives that had supported investment in the previous cycle, the full implementation of projects funded by the National Recovery and Resilience Plan becomes crucial to sustain demand for infrastructure and services. This assessment is of direct relevance to the logistics and transport sector, which is expected to play a central role in delivering the planned measures.
Alongside cyclical risks, the report highlights structural long-term vulnerabilities weighing on the system’s competitive capacity. The share of young people aged 15 to 34 has fallen from 25% in 2005 to the current 20.6% of the population, marking a demographic decline that reduces the available human capital base. The labour market struggles to integrate graduates: only 67.6% are employed, compared with an 81% average in the Eurozone. The result is a talent outflow estimated at 190,000 young people leaving Italy over the past five years, half of them graduates, with a concentration in engineering and IT disciplines. This loss directly translates into reduced innovation capacity for businesses.
The Centro Studi Confindustria outlines alternative scenarios, both more negative than the baseline. If the war extends beyond March 2026, GDP growth could fall to zero (scenario B) or even turn negative (scenario C), with significant implications for employment, investment and public debt stability. The likelihood of these scenarios will depend on the evolution of the conflict and Europe’s ability to rapidly diversify its energy supply sources.
