Italy's Growth Is Modest; Its Borders Are the Bottleneck

Italy enters the autumn with an economy that is growing, but only just. The World Bank's indicator for 2025 puts GDP growth at roughly 0.54 percent, a pace that keeps output above water without generating the kind of momentum that meaningfully dents unemployment. Inflation, at about 1.53 percent, is close to the European Central Bank's target and no longer the emergency it was two years ago. Unemployment stands at 6.39 percent — a figure that would be the envy of much of the eurozone, though it conceals a familiar Italian problem: a low employment rate, particularly among women and the young, means the jobless percentage understates how many people are outside the labour market altogether.

The external value of the euro is part of this picture. The ECB's reference rate for 14 September puts the single currency at 1.1551 dollars, barely changed from 1.1567 a month earlier — a month of remarkable stability. Against sterling the euro buys 0.8560, against the Swiss franc 0.9431, against the Chinese yuan 7.7489 and against the yen 178.52. For Italian exporters, a firm euro against the yen is a competitive disadvantage in Asian markets; against the dollar, the flat line is at least predictable. Predictability, for firms that price contracts months ahead, is worth more than a favourable rate that swings.

That stability matters because Italy's growth depends disproportionately on what it sells and who visits. And on that front, the world wire carries a warning. According to the Guardian, nine EU countries — France, Greece, Portugal and Italy among them — have asked for and received further delay in implementing the Entry/Exit System, the biometric border-check regime that was meant to replace passport stamping at the Schengen external frontier. The stated reason is practical: busy airports need more time to install and test the equipment without creating queues that stretch into the terminal.

The delay is being reported as a travel story, and it is one. But it is also an economic story with a clear Italian accent. Italy's balance of payments leans on tourism more heavily than most large European economies, and the EES is designed to register every non-EU visitor's fingerprints and facial image on entry and exit. Done badly, it adds minutes to every arrival at Fiumicino, Malpensa, Venice and Naples — the gateways through which the country's most lucrative visitors pass. The Guardian's report notes that the holiday hotspots pleaded for more time precisely because their airports could not absorb the change during peak season.

There is a second wire item that points in the same direction. The European Commission, according to The Local Italy, is considering a revision of Schengen short-stay visa rules and fees, with the stated aim of making policy 'more coherent, secure and effective, while facilitating legitimate travel.' Read together with the EES delay, the message from Brussels is that the machinery of Fortress Europe is being tightened and smoothed at the same time — and that the smoothing is being done at the request of member states whose economies cannot afford friction at the border.

For an ordinary Italian reader, the connection between a biometric scanner at an airport and the national growth figure is not obvious, but it is direct. Tourism spending supports hotels, restaurants, transport, retail and a long tail of small firms that employ people in regions where little else does. A border regime that adds fifteen minutes to an arrival may not deter a determined visitor, but it changes the calculus for a weekend break or a conference booking. At 0.54 percent growth, Italy has little margin to absorb that kind of loss.

None of this amounts to a crisis. Inflation is contained, the currency is stable, and unemployment is low by the standards of the past decade. The risk is subtler: an economy growing at half a percent cannot easily replace a lost tourist euro with a new export contract, and the infrastructure decisions being taken now in Brussels and Rome will shape whether the next few seasons are smooth or strained. The numbers in front of us describe a country holding its ground. Whether it holds it depends on details that rarely make the front page — the length of a queue, the speed of a scanner, the willingness of a visitor to come back.