Italy's macroeconomic trajectory over the past several years has defied regional trends, delivering a growth performance that has outstripped key Eurozone counterparts including Germany and France. According to a recent analysis published by UBS, this expansion has been predominantly anchored in robust investment spending, a trend significantly amplified by targeted fiscal stimulus measures. The data reveals that since 2019, Italy's real GDP growth rate has consistently surpassed that of the broader Eurozone, marking a distinct period of economic resilience.
Key Drivers of Growth
- Construction Sector Surge: Fixed investment has emerged as the primary engine of Italy's economic expansion since 2019. The construction sector, in particular, has experienced a sharp rise in value added, contributing approximately one-third of the total increase in gross value added during this period.
- Fiscal and EU Support: A significant portion of this construction boom was initially catalyzed by the Superbonus housing renovation initiative and substantial funding allocated from the European Union's Recovery and Resilience Facility (RRF). Italy is slated to receive €194 billion through the RRF between 2021 and 2026, with approximately 85% of these funds already disbursed to support various economic activities.
- Improved Labor and Financial Health: The economic upswing has coincided with a decline in unemployment to its lowest levels in decades. Additionally, corporate leverage has decreased, and Italy achieved a notable milestone by recording a positive net international investment position for the first time since the 1980s.
Sustainability and Future Outlook
While the Superbonus program has largely been phased out, construction activity has demonstrated resilience, sustained by the continuous flow of RRF funds and a substantial backlog of previously allocated resources. The analysis notes that one final disbursement from the RRF is scheduled for completion by the end of 2026. Unspent funds are expected to provide further support to economic activity, potentially extending through 2027.