The Bank of Italy has upgraded its full-year inflation forecast for 2026 to 3.1%, citing rising consumer price expectations and the impact of the war in Iran on energy costs.
The central bank's assessment, released Friday, marks a shift in the domestic outlook as geopolitical tensions continue to feed through to household budgets and corporate input prices.
1%, the underlying driver remains the volatility in energy markets linked to the conflict in Iran.
The revision underscores the persistent pressure on European price stability from external supply shocks.
While the Bank of Italy notes that consumer inflation is expected to rise to 3.1%, the underlying driver remains the volatility in energy markets linked to the conflict in Iran.
This development adds to a growing list of European economies grappling with the secondary effects of Middle Eastern instability on their inflation trajectories.
The Italian forecast contrasts with diverging trends elsewhere in Europe.