Executive Summary
The Eurozone is entering Q4 2025 with clearer signs of cyclical improvement. Composite PMIs have firmed above 52, supported by a steady recovery in real disposable income and a turning inventory cycle. GDP is now tracking 0.4–0.5% QoQ, well above the ECB’s earlier expectations.
Monetary policy remains in “wait-and-watch” mode: the ECB is firmly on hold at a 2.00% deposit rate, with a high bar for further action. Inflation is close to target, labour markets remain resilient, and financial conditions are stable. Italy’s macro picture remains slower-moving. Confidence data show a gradual but uneven improvement: consumer sentiment is inching back, construction remains historically strong, but manufacturing continues to struggle with global overcapacity and the post-Superbonus drag. Domestic demand is improving, but overall GDP growth remains modest
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Best regards,
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Federico Polese
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