ROME, April 30 (Reuters) - The Italian economy grew slightly more than expected in the first quarter from the previous three months, preliminary data showed on Thursday, with turmoil in the Middle East casting a shadow over future prospects.
Gross domestic product in the euro zone's third-largest economy rose 0.2% quarter-on-quarter, following a 0.3% increase in the October-to-December period, national statistics bureau ISTAT said.
The main impact of the conflict in Iran, which began with US/Israeli
strikes on February 28, are expected to be felt from the second quarter.
On a year-on-year basis, the Italian economy expanded by 0.7% between January and March after a 0.9% increase in the fourth quarter, which was revised up from a previously reported 0.8% reading.
A Reuters survey of 27 economists had forecast Q1 to show a 0.1% rise quarter-on-quarter and a 0.6% increase year-on-year.
The quarter-on-quarter growth between January and March was the result of a positive contribution from trade flows which more than offset a decline in domestic demand, ISTAT said.
It gave no numerical breakdown of components with its preliminary estimate, but said services expanded, while both industry and agriculture contracted.
So-called "acquired growth" stood at 0.5% at the end of the first quarter, meaning that even if GDP is flat in each of the remaining three quarters of 2026, full-year growth will be up 0.5% from 2025.
Giorgia Meloni's government last week cut its economic growth outlook to 0.6% for this year and next, reflecting surging energy prices and geopolitical tensions, from previous targets of 0.7% and 0.8% respectively.
In 2025 Italy grew by 0.5%.
The government forecast a 0.8% growth rate for 2028, which would mark six consecutive years of sub-1% growth.
(Reporting by Antonella Cinelli, graphic by Stefano Bernabei, editing by Gavin Jones)
