Italy GDP Q4 2016

Italy

Italy: Economy decelerates slightly in the final quarter of 2016, dragged down by inventories

The Italian economy decelerated slightly and recorded another period of mild growth in the final quarter of 2016. In Q4 2016, GDP grew 0.2% over the previous quarter in seasonally- and working-day adjusted terms, according to detailed data released by the National Statistics Office (Istat) on 3 March. The reading matched the preliminary estimate and came in below the 0.3% rise in Q3. The final quarter’s subdued result nevertheless brought full-year 2016 GDP growth to 1.0%, up from 0.7% in 2015 and the highest reading since 2010.

Growth in Italy continues to be underpinned by recovering domestic demand, while the external sector didn’t contribute to growth. In particular, fixed investment grew 1.3% in Q4 quarter-on-quarter, on the back of the double-digit growth recorded in the transport sector and supported by growing new orders, as attested by the upward trend of the manufacturing PMI in the final months of last year. Government consumption also added to growth, as it swung from a 0.2% qoq contraction in Q3 to a 0.6% expansion in the fourth quarter. Nevertheless, inventories subtracted 0.2 percentage points from growth, contrasting the previous quarter’s mildly positive contribution, and private consumption virtually stalled (+0.1% qoq), probably weakened by the uncertain political situation ahead of the 4 December constitutional referendum.

Meanwhile, the contribution of foreign net demand to growth was zero, which represented an improvement from the previous quarter, when the external sector subtracted from growth. Imports of goods and services accelerated from a 1.0% increase in Q3 to a 2.2% rise in Q4, and exports expanded 1.9% in the fourth quarter, which was up from the 0.3% increase observed in Q3.

The Italian economy continues to grow feebly, weighed down by numerous and long-standing structural weaknesses, which also affect the outlook: its rigid labor market, the high volume of NPLs burdening the banking sector, its bloated public sector and high taxes. The renewed political instability adds to all these factors, making growth prospects for the Mediterranean country very modest.

Panelists see the economy increasing 0.9% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, panelists expect the economy to expand 1.0%.


Sample Report

Looking for forecasts related to GDP in Italy? Download a sample report now.

Download

Italy GDP Chart


Italy GDP Q4 2016 0

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: National Statistics Institute and FocusEconomics Consensus Forecast.


Italy Economic News

  • Italy: Business confidence dips slightly in May

    May 26, 2017

    The National Institute of Statistics (Istat) composite business confidence indicator (IESE, Istat Economic Sentiment Indicator), which covers the manufacturing, construction, service and retail sectors, dropped from April’s revised 106.8 (previously reported: 107.4) to 106.2 in May. Two out of four categories of the indicator deteriorated compared to April: manufacturing and services, with the former dragged down mainly by expectations of lower order books.

    Read more

  • Italy: Consumer confidence falls to an almost two and a half years low in May

    May 26, 2017

    The National Institute of Statistics’ (Istat) consumer confidence index dropped from April’s revised 107.4 points (previously reported: 107.5 points) to 105.4 points in May, marking the worst result since January 2015. May’s reading reflected an almost broad-based deterioration in households’ assessments, with only their assessment on the current general economic situation remaining unchanged.

    Read more

  • Italy: Economy keeps pace in Q1 2017

    May 16, 2017

    Italian GDP grew 0.2% over the previous quarter in Q1 in seasonally and working-day adjusted terms, according to an advance estimate released by the National Statistics Office (ISTAT) on 16 May.

    Read more

  • Italy: Inflation rebounds in April

    May 15, 2017

    According to revised data released by the National Statistical Institute (Istat), consumer prices rose 0.4% on a monthly basis in April (previously reported: 0.3% month-on-month), up from March’s flat reading.

    Read more

  • Italy: Growth in industrial production softens in March

    May 10, 2017

    Industrial output in Italy grew 0.4% in March on a month-on-month seasonally adjusted basis, down from the 1.0% increase registered in February but slightly overshooting analysts’ expectations of a 0.3% expansion.

    Read more

More news

Search form