The Bank of Italy raised its outlook for the country's economy, judging that a positive start to the year will outweigh fallout that followed from the Iran war.

The upward revision marks another boon for Prime Minister Giorgia Meloni, whose government has benefited from a string of encouraging economic data in recent months. The central bank's updated projections reflect resilience in domestic demand and stronger-than-expected export performance during the first quarter.

Officials noted that while geopolitical tensions in the Middle East pose risks to energy prices and supply chains, the Italian economy has demonstrated sufficient momentum to absorb external shocks. The revised forecast underscores improving confidence among households and businesses, supported by declining inflation and favorable financing conditions.

The growth upgrade aligns with similar moves by international institutions and reinforces the narrative of Italy outperforming many euro-area peers. For Meloni's administration, the validation from the nation's top monetary authority provides political ammunition ahead of European Parliament elections.