Italy Business, Consumer Confidence Declines in March Amid Worsening Outlook

28 Mar, 2025

Italy’s business and consumer confidence declined sharply in March, signaling concerns for the euro zone’s third-largest economy. According to national statistics bureau ISTAT, the composite business confidence index fell to 93.3 from 94.7 in February, marking its lowest level since November 2023. The decline was driven by weakening sentiment in the service and manufacturing sectors, though construction confidence improved slightly, and retail sentiment remained stable.

Consumer confidence plunged to 95.0 from 98.8, significantly below analyst expectations. This marks the lowest level since November last year, raising concerns about economic stability. The slump in sentiment reflects uncertainty over Italy’s growth prospects, with geopolitical tensions, potential U.S. trade tariffs, and difficulties in utilizing EU pandemic recovery funds adding to the economic pressure.

Italy’s economy grew by just 0.7% in 2024, missing the government’s 1% target and mirroring the previous year’s growth rate. Analysts predict another year of slow expansion in 2025, with growth expectations again below the government’s 1.2% target. Weak economic indicators highlight Italy’s struggle to regain momentum, casting doubt on the country’s ability to achieve sustained growth.

Persistent economic challenges, combined with external uncertainties, are weighing on business and consumer sentiment. The services sector, a key driver of the Italian economy, saw the most significant drop in morale, further dampening hopes for a near-term recovery.

As Italy grapples with economic headwinds, policymakers face mounting pressure to stimulate growth and restore confidence. The coming months will be critical in determining whether Italy can navigate these challenges and improve its economic outlook.

Stay updated on Italy’s economic developments and business trends to understand the broader implications for the European market.
 

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