Italy has hit record-high employment of over 63 percent and historic low unemployment of 6.3 percent amid a major welfare overhaul led by Prime Minister Giorgia Meloni. By Q2 2026, the workforce expanded to 24.36 million people.
In January 2024, Italy completely replaced its old guaranteed minimum income with two targeted programs. Averaging €672/month for 690,000 vulnerable households (elderly, disabled, families with kids), as of June 2026, active benefits are tied to mandatory job training, covering over 84,000 individuals, writes La Gaceta, citing data out of Istat.
Of former welfare recipients, 60 percent transitioned to the new benefits, and 26 percent of these households had at least one member find a job in 2024. However, around 850,000 families saw their income drop by an average of €2,600 per year due to stricter welfare criteria.
Especially in historically lagging Southern Italy (Mezzogiorno), the results have been impressive. The region grew 8.5 percent between 2021 and 2024 and creating nearly 500,000 jobs via tourism, construction, and EU funds.
Italy’s employment rate still lags 8 percentage points behind the eurozone average, bogged down by low youth and female workforce participation.
Backed by strong employment and business resilience, Scope Ratings affirmed Italy’s BBB+ rating with a positive outlook. The agency forecasts 1 percent GDP growth, 3 percent inflation, and a reduced public deficit of 2.9 percent for 2026, noting positive consumption while low productivity remains a weak spot for the country.
Real GDP growth for 2026 for all of the EU is forecasted at 1.1 percent.
Last month, Italian PM Giorgia Meloni touted tourism and “Made in Italy” exports as key factors for helping the economy stay resilient.
