The war in the Middle East, with the crisis in Iran and the Strait of Hormuz, risks having lasting effects on the Italian economy.
This was stated by the Ministry of Economy and Finance, which in a note explained that if the conflict were to continue, the negative impact on growth could go well beyond the short term.
Mef, negative effects on growth if the war is prolonged
At this moment, the Italian economy is already experiencing a slowdown, between the suffering of the markets, the skyrocketing price of oil which has increased costs across the board and the temporary cut in excise duties which has distracted resources from other key sectors of society.
But the point is not just the immediate slowdown: the real fear, the MEF explains, is that a long-term dynamic will be triggered capable of simultaneously affecting energy, inflation and market confidence.
The first signal concerns the price of oil which has started to rise again, with Brent exceeding 100 dollars a barrel for the first time since 2022. It is not just a psychological threshold, it is the certification that producing and transporting goods has become more expensive: when energy costs more, the whole economy slows down. Businesses see production costs increase, families reduce their purchasing power and inflation rises again. It is a chain effect that risks compressing growth just as Italy was looking for stability.
The Mef speaks openly of “significant elements of uncertainty”, underlining how high energy prices can have repercussions in both the short and medium term.
According to rumors reported by Bloombergthe Government led by Giorgia Meloni is reportedly considering a cut in growth estimates: the most prudent hypothesis brings GDP up to 0.5%.
Confindustria has already moved forward: its Research Center has cut growth estimates according to three scenarios: in the worst case scenario (10-month long war), 2026 GDP is seen as “in recession” at -0.7%; with 4 months of war “it is estimated to be stagnant”, zero growth; with a stop to the war by March “it will be equal to +0.5%”. In autumn the estimate was +0.7%.
Much will depend on the duration of the conflict: the longer the war continues, the greater the risk that the shock will become a reality.
Then there is a less immediate, but equally decisive element: trust. The Mef highlights that if businesses and consumers begin to perceive an unstable scenario, the consequences come quickly.
Companies postpone investments, families reduce spending. This is how an international conflict can turn into a brake on growth. It’s not just a question of numbers, but of expectations. And expectations, in economics, often matter as much as actual data.
Public accounts under observation
Although the picture is becoming more complex, the Government’s message remains marked by prudence. The Mef reiterates its commitment to keeping public accounts under control, without giving up support for the most vulnerable groups.
The deficit and debt objectives remain unchanged, as does the desire to maintain a sustainable trajectory. The new assessments will be included in the Public Finance Document scheduled for April, where the entire macroeconomic framework will be updated.
Issuance of government bonds
Meanwhile, government bond issues are proceeding according to plan, with a significant portion already placed in the first months of the year.
However, significant volumes remain to be financed in the coming months, in a context in which rates and global uncertainty make every operation more sensitive.
