Italy told it could learn from Spain’s stronger economic growth model

10:45

Italy could improve its long-term economic performance by adopting policy lessons from Spain, according to a new report from the national statistics institute ISTAT.

The analysis highlights that Italy’s economy is expected to grow by less than 1% this year, marking a fourth consecutive year of weak expansion. Between 2023 and 2025, Italy recorded cumulative growth of around 2.3%, significantly lower than Spain’s performance over the same period.

In contrast, Spain achieved growth of roughly 9%, driven by stronger labor market dynamics, higher investment levels, and more effective policy choices, according to ISTAT. The comparison underscores widening economic differences within the eurozone.

Economists point to several structural challenges weighing on the Italian economy, including low productivity growth, an aging population, and relatively weak investment in innovation and technology. These factors continue to limit Italy’s competitiveness compared to other major European economies.

One of the most pressing issues is labor market participation. Italy records one of the lowest employment engagement rates in the European Union, with a large share of the working-age population neither employed nor actively seeking work. This contrasts sharply with the broader EU average.

Spain, meanwhile, has benefited from stronger labor market integration and policies aimed at boosting employment and attracting investment, helping to support more dynamic economic growth.

ISTAT’s report suggests that addressing demographic decline and improving workforce participation could be key to strengthening Italy’s economic outlook in the coming years. The institute also emphasizes the need for greater focus on technological investment and long-term development strategies.

The findings have sparked renewed debate among policymakers about how Italy can close the gap with faster-growing European economies and ensure more sustainable growth in the future.