Headline annual inflation reached a fresh low of more than three years but the greenback’s performance was mixed.
Italy aims to accelerate fiscal tightening to exit the Excessive Deficit Procedure earlier than expected, but high public debt, structural economic weaknesses and unfavourable demographics pose challenges.
Germany is facing demographic challenges with more acute structural pressures than other advanced economies. Labour-market and pension reforms are essential, but fragmented politics risk are eroding competitiveness.