The key numbers of the moment

Before considering the strategic implications, it is useful to lay the data on the table with precision. This is not about alarm, but about awareness: the figures circulating in institutional reports tell of an Europe that has found a pace, but that pace is slow.

In the fourth quarter of 2025, the Eurozone's GDP grew by 0.3% on a quarterly basis, with annual growth stopping around 1.3%–1.4%. The forecasts for 2026 remain moderate, with expected growth around 1.2%.

For Italy, the picture is even more cautious. According to the ISTAT outlook updated in December 2025, Italian GDP is expected to grow by 0.5% in 2025 and by 0.8% in 2026, after increasing by 0.7% in 2024. The macroeconomic projections from the Bank of Italy in April 2026 confirm this scenario of cautious optimism.

Why is it growing so slowly?

There is no single cause, but a web of factors that add up and amplify each other.

Global trade tensions.The uncertainty surrounding US trade policy has significantly weighed on the expectations of European exporting companies throughout 2025. American tariffs have created fluctuations in Italian exports — growth in the first and third quarters (with order anticipations before the measures came into effect), contraction in the second. For 2026, ISTAT estimates a gradual easing of these tensions, but uncertainty remains a constraining factor.

The appreciation of the euro.Throughout 2025, the dollar weakened against the euro, which averaged at 1.13 dollars, with an appreciation of 4.4% compared to 2024. For 2026, a further push towards 1.16 dollars per euro is expected. A stronger euro makes European exports more expensive in international markets — a significant competitive brake for Italian manufacturing.

Domestic demand: stable but not vibrant.Italian household consumption is growing slowly: +0.8% in 2025 and +0.9% in 2026. The labour market is holding, wages are rising above inflation, but consumers still show a high propensity to save. This signals that confidence in the future is not yet fully established.

The positive point: investments.The most encouraging data comes from investments: +2.8% in 2025 and +2.7% in 2026, mainly driven by infrastructure and the completion of PNRR projects. This is the most concrete signal that the economy is building foundations for future growth, even if the benefits are not yet fully visible in GDP figures.

What it means for those doing business in Europe.

Simply put: a market that grows by 1.2% per year is not a stagnant market, but a market where the margin for error narrows. If the market was expanding by 3–4% per year, even a mediocre positioning would bear fruit. In a context of slow growth, only companies with a clear strategy manage to gain ground.

The market holds: demand exists, but it does not grow enough to automatically carry all players along. Slow growth means that every point of market share gained is taken from someone else — competition becomes structurally more intense. Geographical expansion into faster-growing markets, or into unoccupied European niches, becomes a priority strategic lever. Positioning matters more than volume: in a slowed market, companies perceived as premium or specialised suffer less from price pressure. Relationships — with customers, partners, institutions — become real competitive barriers, not just simple soft skills.

The paradox of increased competition

There is a mechanism worth understanding well. When growth slows, not all market players slow down at the same pace. Some companies invest, reposition themselves, enter new segments. Others remain stagnant. The result is that the gap between those who grow and those who stagnate widens — even with a national GDP that shows only +0.8%.

In other words: the slow growth of the aggregate does not mean there is no room to grow. It means that growing requires more precise choices, resources allocated more intelligently, and a strategic focus that was less necessary during periods of widespread expansion.

READING TIME: 4 MIN

Sources: ISTAT, The Prospects for the Italian Economy 2025–2026 (December 2025) · Bank of Italy, Macroeconomic Projections Italy, April 2026 ISTAT