Italy halves 2025 growth forecast over tariff fears

Milan: The Italian government is preparing to lower its economic growth forecast for this year from 1.2 to 0.6 percent amid concerns about US tariffs, a government source said Wednesday.

This forecast is included in the economic roadmap for the coming years, which is expected to be approved by Prime Minister Giorgia Meloni’s cabinet.

Meloni has criticised US President Donald Trump’s sweeping new tariffs, including duties of 20 percent on imports from the European Union, and has urged both sides to reach a deal.

The leader of the far-right Brothers of Italy party announced Tuesday she would visit Washington on April 17 to talk to Trump directly.

Italy, the eurozone’s third-largest economy, is the world’s fourth-largest exporter and risks being hard hit by the new tariffs.

Around 10 percent of its exports go to the United States, and last year Rome had a trade surplus with Washington of 38.9 billion euros.

Despite her efforts to avoid antagonising Trump, Meloni has criticised the tariffs as “wrong”, and repeated Tuesday that “a trade war between Europe and the United States does not suit anyone”.

Speaking to businesses, she said it was difficult to precisely assess the impact on Italy, but warned against “panic and alarmism” that she said “risk doing more damage than the measure itself”.

Meloni announced plans to repurpose up to 25 billion euros ($27 billion) of EU funds already allocated to Italy to help mitigate the impact on businesses.

The Bank of Italy last week also revised its growth forecast for this year, down from 0.7 percent to 0.5 percent.

And it lowered its estimates for 2026 and 2027, now forecasting 0.9 percent and 0.7 percent respectively, compared to 1.2 and 0.9 percent previously.