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Investing.com -- Italy’s leading business association, Confindustria, has revised down its economic growth forecast for the nation, citing the potential impact of impending U.S. trade tariffs.
The U.S. President, Donald Trump, was anticipated to disclose a comprehensive tariff plan later on Wednesday. Businesses, consumers, and investors worldwide are concerned about an escalating trade war.
Confindustria now predicts Italy’s gross domestic product (GDP) will grow by 0.6% this year. This is a significant reduction from the government’s official forecast of 1.2% and also lower than the 0.9% growth rate the association estimated in October.
The association also forecasts that Italy’s GDP growth will improve to 1% in 2026. The economy of the euro zone’s third-largest country expanded by a modest 0.7% in both 2024 and 2023.
In the fourth quarter of last year, the country managed to achieve growth of 0.1% from the previous three months, after experiencing stagnation in the third quarter. Most analysts do not anticipate a significant upturn in the near future.
Confindustria’s forecasts take into account the already-announced U.S. tariffs on steel and aluminum and the "record levels of uncertainty" on trade policy. However, these predictions do not consider the potential effects of an escalating trade war.
In a worst-case scenario, Confindustria warns that if permanent U.S. tariffs of 25% on all imports are introduced, rising to 60% for China, and retaliatory measures against U.S. exports are implemented, Italy’s GDP growth could decline to approximately 0.2% in 2025 and 0.3% in 2026.
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