In December 2024, Italy's composite business morale index saw a notable increase, rising to 95.3 from a three-year low of 93.2 recorded in November.

This improvement in business morale was driven by a significant rise in the service sector, where sentiment jumped to 99.6 from 93.9, although the manufacturing morale sub-index fell slightly to 85.8 from 86.5.

Despite the uptick in business morale, consumer confidence continued to decline for the third consecutive month, dropping to 96.3 in December from 96.6 in November, and falling short of the median forecast of 97.0.

These mixed signals reflect a challenging economic landscape for Italy, the third largest economy in the euro zone, which has faced stagnation in recent months.

Italy's GDP stagnated in the third quarter of 2024, with ISTAT indicating no expected improvement in the fourth quarter.

ISTAT has projected full-year economic growth at approximately 0.5%, which is significantly below the government's official target of 1.0%.

Looking ahead, analysts anticipate that growth in 2025 will also fall short of the Italian government's forecast of 1.2%.