{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Italy",
  "publication": "IMF News, July 22, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/07/21/pr-25258-italy-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "On July 18, the Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Italy",
  "publishDate": "2025-07-22",
  "sections": [
    {
      "heading": "Economic performance and recent developments",
      "content": "- Real GDP grew 0.7 percent in 2024, supported by spending under the National Recovery and Resilience Plan (NRRP) and a positive contribution from net exports.\n- In the first quarter of 2025, economic activity remained resilient with continued investment growth and a robust labor market.\n- Headline inflation gradually increased to just below 2 percent in June 2025.\n- Credit dynamics: credit to households has turned positive; the contraction in credit to corporates has eased.\n- 2024 public-sector deficit and debt ratios turned out better than projected and enabled a return to a primary surplus.\n- Persistent challenges: public debt remains high; productivity growth is weak; the population is rapidly aging; female labor force participation remains well below the EU average; regional disparities endure."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Growth projections:\n  - Growth is projected to moderate to 0.5 percent in 2025.\n  - Growth is projected to pick up to 0.8 percent in 2026, supported by increased NRRP-related spending and positive trade spillovers from Germany.\n- Inflation projections:\n  - Headline inflation is expected to average 1.7 percent in 2025.\n  - Headline inflation is expected to converge to the ECB’s 2 percent target in 2026.\n- Risks:\n  - Upside: global growth acceleration; stronger gains from public investments and reforms.\n  - Downside: productivity growth could disappoint (for example, delayed NRRP implementation); escalation of trade tensions; intensification of regional conflicts; tightening global financial conditions and higher financing costs; macro-critical climate-related shocks."
    },
    {
      "heading": "Fiscal position and policy recommendations",
      "content": "- Recent outcome:\n  - 2024 fiscal outturn enabled a return to a primary surplus.\n- Directors’ fiscal guidance:\n  - Sustained consolidation needed to place public debt on a clear downward path.\n  - Authorities’ commitment to a medium‑term fiscal plan that balances debt sustainability and investment needs and aligns with the EU fiscal framework was welcomed.\n  - Recommended fiscal measures:\n    - Continue to improve tax compliance.\n    - Rationalize tax expenditures.\n    - Replace inefficient subsidies with productivity‑enhancing measures.\n    - Any new spending measures should be compensated with savings elsewhere.\n    - Contain pension‑related pressures.\n    - Improve cost effectiveness of spending.\n    - De‑risk the public sector by reducing outstanding publicly guaranteed loans and strengthen transparency and monitoring of contingent liabilities."
    },
    {
      "heading": "Structural reforms and growth-enhancing measures",
      "content": "- Priority reforms to durably lift productivity and growth:\n  - Full and timely completion of the NRRP remains a priority.\n  - Successor reforms should build on NRRP lessons and focus on:\n    - Boosting productivity and innovation.\n    - Increasing the supply of skilled labor and labor participation.\n    - Advancing the transition to renewable energy and resilient energy infrastructure.\n  - Improve access to risk capital to revive private sector dynamism.\n  - Deepen EU‑level integration to improve access to finance.\n  - Ensure industrial policies are well‑targeted to address market failures and coordinated at the EU level.\n- Support for green transition and energy security recommendations was broadly endorsed."
    },
    {
      "heading": "Financial sector and macroprudential stance",
      "content": "- Directors welcomed further improvement in banking sector soundness.\n- Macroprudential policies should balance stability requirements with the need to support credit provision.\n- Recommendations and cautions:\n  - Continue vigilance in monitoring loan quality and sovereign–bank links.\n  - Address remaining vulnerabilities among some less significant institutions.\n  - Continue efforts to address the 2020 FSAP recommendations and strengthen the AML/CFT framework."
    },
    {
      "heading": "Executive Board assessment and process",
      "content": "- Executive Directors agreed with the thrust of staff appraisal.\n- They welcomed economic resilience, strong policies supporting continued growth, and record‑high employment.\n- Directors stressed accelerating reform momentum to strengthen Italy’s growth trajectory as a key priority.\n- It is expected that the next Article IV consultation with Italy will be held on the standard 12‑month cycle."
    },
    {
      "heading": "Key selected indicators (as reported)",
      "content": "- Real Economy (change in percent)\n  - Real GDP: 4.8 (2022); 0.7 (2023); 0.5 (2024); 0.8 (2025); 0.6 (2026); (2027 not shown)\n  - Final domestic demand: 2.3 (2022); 0.9 (2023)\n  - Exports of goods and services: 9.9 (2022); 0.2 (2023); 0.4 (2024); -2.4 (2025)\n  - Imports of goods and services: 12.9 (2022); -1.6 (2023); -0.7 (2024); -2.0 (2025)\n  - Consumer prices: 8.7 (2022); 5.9 (2023); 1.1 (2024); 1.7 (2025); 2.0 (2026)\n  - Unemployment rate (percent) 1/: 8.1 (2022); 7.7 (2023); 6.6 (2024); 6.7 (2025); 6.8 (2026)\n- Public Finances\n  - General government net lending/borrowing 2/: -8.1 (2022); -7.2 (2023); -3.4 (2024); -3.3 (2025); -2.8 (2026); -2.7 (2027)\n  - Structural overall balance (percent of potential GDP): -8.7 (2022); -7.7 (2023); -3.5 (2024); -3.1 (2025); -2.6 (2026); -2.5 (2027)\n  - General government gross debt 2/: 138.3 (2022); 134.6 (2023); 135.3 (2024); 136.9 (2025); 138.4 (2026); 138.5 (2027)\n- Balance of Payments (percent of GDP)\n  - Current account balance: -1.7 (2022); 0.1 (2023); 1.2 (2024)\n  - Trade balance: -1.8 (2022); 1.5 (2023); 2.6 (2024); 1.9 (2025); 2.1 (2026)\n- Exchange Rate\n  - Exchange rate regime: Member of the EMU\n  - Nominal effective rate: CPI based (2000=100): 104.6 (2022); 108.2 (2023); 110.0 (2024)\n\nSource: IMF Executive Board press release — IMF Executive Board Concludes 2025 Article IV Consultation with Italy (July 22, 2025).\n\n---\n\n\n References\n\n- Italy and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/en/Countries/ITA\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/07/21/pr-25258-italy-imf-executive-board-concludes-2025-article-iv-consultation"
    }
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    "Published: July 22, 2025",
    "Real GDP grew 0.7 percent in 2024, supported by spending under the National Recovery and Resilience Plan (NRRP) and a positive contribution from net exports.",
    "In the first quarter of 2025, economic activity remained resilient with continued investment growth and a robust labor market.",
    "Headline inflation gradually increased to just below 2 percent in June 2025.",
    "Credit dynamics: credit to households has turned positive; the contraction in credit to corporates has eased.",
    "2024 public-sector deficit and debt ratios turned out better than projected and enabled a return to a primary surplus.",
    "Persistent challenges: public debt remains high; productivity growth is weak; the population is rapidly aging; female labor force participation remains well below the EU average; regional disparities endure.",
    "Growth projections:",
    "Inflation projections:",
    "Risks:",
    "Recent outcome:",
    "Directors’ fiscal guidance:",
    "Priority reforms to durably lift productivity and growth:",
    "Support for green transition and energy security recommendations was broadly endorsed.",
    "Directors welcomed further improvement in banking sector soundness.",
    "Macroprudential policies should balance stability requirements with the need to support credit provision.",
    "Recommendations and cautions:",
    "Executive Directors agreed with the thrust of staff appraisal.",
    "They welcomed economic resilience, strong policies supporting continued growth, and record‑high employment.",
    "Directors stressed accelerating reform momentum to strengthen Italy’s growth trajectory as a key priority.",
    "It is expected that the next Article IV consultation with Italy will be held on the standard 12‑month cycle.",
    "Real Economy (change in percent)",
    "Public Finances",
    "Balance of Payments (percent of GDP)",
    "Exchange Rate",
    "[Italy and the IMF](http://www.imf.org/external/country/ITA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/en/Countries/ITA](http://www.imf.org/en/Countries/ITA)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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