Italian industrial output fell 1.0% in June from the previous month, national statistics bureau ISTAT reported on Thursday, a far weaker reading than expected that darkens the outlook for the euro zone’s third-largest economy.

A Reuters survey of 13 analysts had pointed to a 0.3% month-on-month rise in June, reversing a 0.3% decline in May. On a work day-adjusted year-on-year basis, output was down 0.6% in June, versus a forecast of a 1.0% increase.

Despite the June setback, in the second quarter industrial output was still up 0.4% quarter-on-quarter, following a 0.3% fall between January and March. The Italian economy has held up better than many analysts expected in the first half of this year, with gross domestic product rising by 0.3% in the first quarter and 0.2% in the second.

Giorgia Meloni’s government in April forecast full-year 2026 gross domestic product growth of 0.6%, but the budget watchdog UPB on Tuesday issued a significantly more upbeat projection of 0.9%. In 2025 Italy grew by 0.5%, a third straight year of sub-1% growth.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.