Business · Economy · 8 hrs ago
Panetta warns of price and rate risks despite economic resilience
Bank of Italy Governor Fabio Panetta said Italy's economy is holding up better than expected, while warning that the outlook is uncertain.
He spoke at the World Savings Day event in Rome on October 30, 2026, where speakers discussed saving in a changing society.
Panetta urged Italy to continue its recent cautious approach to public finances, which he said had helped soften the impact of rising global interest rates.
He said Italy's budget deficit had fallen from 9% of GDP in 2020 to about 3%, and that credit rating agencies had improved their assessment of the country.
Higher energy costs are weighing on households and businesses, while geopolitical risks and financial tensions add to uncertainty.
Panetta said inflation and borrowing costs could rise further, and official interest rates may need to increase if prices remain above target.
He said monetary policy cannot stop energy prices rising directly, but should prevent those increases from driving lasting inflation expectations and a costly wage-price spiral.
Bank of Italy Governor Fabio Panetta said Italy and Europe’s economies are holding up better than expected, but face risks from prices and interest rates.
He warned that the energy shock is weighing on household budgets and business costs, alongside geopolitical risks and financial tensions.
Panetta said inflation and higher financing costs could worsen in coming months, and further official rate increases may be needed.
He urged Italy to continue its recent policy of budget prudence, which he said had helped limit the effects of global rate rises.
Panetta made the remarks at the World Savings Day event in Rome on 30 October 2026.
- Who
- Fabio Panetta, governor of the Bank of Italy.
- What
- He said the economy was resilient but warned of risks from inflation, energy costs and interest rates.
- When
- 30 October 2026.
- Where
- The Salone delle Fontane in Rome.
- Why
- The energy shock, geopolitical risks and financial tensions are clouding economic prospects and could worsen inflation and financing costs.
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- Speaker
- Fabio Panetta
- Role
- Governor of the Bank of Italy
- Event
- 102nd World Savings Day
- Location
- Salone delle Fontane, Rome
- Date
- 30 October 2026
What people are saying
The European economy is showing, like the Italian one, a resilience greater than expected.
The prospects are, however, clouded by the energy shock.
With price dynamics set to remain above the target for a long time and risks tilted to the upside, further increases in official rates could be necessary.
Monetary policy cannot prevent price rises caused directly by the energy shock.