Italy's economy barely moved in 2024 as euro slides against dollar

Growth of 0.69% and a weakening currency add pressure as heatwave strains the continent.

Italy's gross domestic product grew by 0.69 per cent in 2024, according to World Bank data, a pace that underscores the stagnation that has characterised the eurozone's third-largest economy. The figure sits well below the growth rates of peer economies and reflects the structural headwinds—ageing population, emigration of working-age citizens, and modest productivity gains—that have defined Italy's economic performance for two decades.

Inflation, meanwhile, has cooled to 0.98 per cent, a sign that price pressures have eased across the bloc. Yet the unemployment rate stood at 6.39 per cent in 2025, suggesting that job creation has not kept pace with the need to absorb idle labour, particularly among younger workers.

The currency markets have shifted against Italy in recent weeks. The euro has weakened to 1.1467 against the dollar as of 19 June, down from 1.1595 a month earlier. For an economy that relies heavily on exports—machinery, vehicles, textiles, and food products—a softer euro can help competitiveness abroad, but it also raises the cost of imported energy and raw materials, a particular concern as Europe faces a severe heatwave.

France 24 reported on Saturday that much of Western Europe is sweltering under record temperatures, with authorities in France placing more than a third of the country under red heat alert and cancelling outdoor events. Italy too faces extreme heat this week, with temperatures expected to reach 40 degrees Celsius in some regions. Such weather strains power grids, disrupts transport and tourism, and can crimp economic activity in the short term.

The government's debt-to-GDP ratio, at 77.3 per cent, remains among the highest in the eurozone, a legacy of the financial crisis and subsequent stagnation. While inflation has moderated, the European Central Bank's policy path will shape borrowing costs for the state and private sector alike in the months ahead. Italy's narrow growth and persistent fiscal burden leave little room for economic shocks.